FHA LOAN LIMITS RAISED AGAIN: Additional Homes Will Qualify For FHA Financing

With signing of the American Recovery and Reinvestment Act of 2009 into law by President Obama, FHA loan limits have been reinstated to the loan limits of 2008. What this means is that Maricopa and Pinal will have their loan limits raised from the current level of $271,050 back to $346,250. This will help more homeowners be able to qualify for an FHA loan in 2009 for both the purchase and refinance of a home loan.



FHA financing still has some of the lowest down payment requirements of all loans at 3.5% for a purchase. While also allowing higher loan to values for borrowers looking to refinance their home. So this along with the recently amended $8,000 home buyer tax credit is good news for the housing market.



In addition, the next week should bring more details about additional programs from the current administration aimed at helping the housing market that are set to launch very soon. Including the proposed refinance program to help home buyers who owe more than their homes are worth.



Stay tuned for details.

Tax Credit Information for First Time Home Buyers and FHA Loan Limits

Homebuyer Tax Credit — The bill provides for a $8,000 tax credit that would be available to first-time home buyers for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009. The credit does not require repayment. Most of the mechanics of the credit will be the same as under the 2008 rules: the credit will be claimed on a tax return to reduce the purchaser's income tax liability. If any credit amount remains unused, then the unused amount will be refunded as a check to the purchaser. More details are available below in the Federal Tax Report>

· FHA, Fannie Mae and Freddie Mac Loan Limits — The bill reinstates last year's 2008 loan limits for FHA, Freddie Mac, and Fannie Mae loans. These limits were equal to the greater of 125% of the 2008 local area median home price or $271,050 for FHA and $417,000 for Fannie and Freddie, with an overall maximum cap of $729,750. For the few areas where the 2009 limits were higher, the higher limits will apply. In addition, the bill includes language providing the HUD Secretary with the discretion, if warranted, to increase the loan limit for any "sub-area", i.e.an area smaller than a county. The Secretary's discretion is again limited by the $729,750 cap. These 2009 limits will expire December 31, 2009.

Call a member of My Arizona Home Team Real Estate consultant for the latest market information.

One more reason to buy a home now....

$8,000 Home Buyer Tax Credit at a Glance

The tax credit is for first-time home buyers only.

The tax credit does not have to be repaid.

The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.

The credit is available for homes purchased on or after January 1, 2009 and before December 1, 2009.

Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.

4 Ways to Entice Buyers to Purchase Your Home

With the amount of homes in the market, you have to go over and beyond to get an offer. Here are 4 helpful tips that buyers are looking for.

1.• Aim to create a princely front entrance. Clean cobwebs, scrub the front door clean. While the Realtor is fumbling around with the lock box, buyers are looking up and down in the front entrance. Smart home builders spend money on a polished front entrance because they know how much this influences buyers. I'm talking about the front door, the walkway and any steps leading into the house, as well as landscaping around the front door. All this has to be perfect

2.Create a positive ambiance with natural scents. The smell of fresh baked cookies or homemade bread always helps to create the smell of a cozy home. If you don't have time for that, a candle works great or electric plug ins. The smell of fish and hard spices distract buyers.

3.Clean like crazy and remove personal items. An immaculate property is almost certain to gain extra attention from prospective purchase. Sweeping the floor is not enough. You need to clean every crack, crevice and corner - and to remove every item that's personal to you. Pay even more attention particularly in your kitchen and bathrooms. Anything personal must be carted out of a property before it's listed for sale, including trophies, books, family photographs and even the artwork. Buyers want to picture themselves living in the home, not you.

4. Make your home available to Realtors. The easier it is to show your home, the more chances your home will be shown. If you have a list of things a Realtor has to do before showing your home. It may not get shown. Realtors very often show a dozen homes at a time and they don;t have much time in between each home.

If you follow these steps, you will be impressed by the response! Think of My AZ Home Team when looking to buy or sell a home.

Brand new listing in a Chandler Active Adult Golf Community....on the golf course!

Disadvantages of Paying Cash for your Second Home

When considering paying cash for your second home, you need to think about more than just whether you have the money to cover all the related costs. You also need to keep in mind long-term tax strategies and the economy of the area where your second home will be located. Second-home buyers sometimes view these factors as disadvantages to a cash deal:

* When you file your federal income taxes, you don't get to deduct the mortgage interest that you paid. You lose out on this key benefit of homeownership. You need to figure out exactly how much money you would save on taxes by taking out a mortgage, and compare that with how much money you would save by not paying monthly principal and interest payments. If calculating this is out of your realm, talk to an accountant or financial advisor who is knowledgeable about the tax benefits of homeownership. She can set you straight as to which is the smarter financial move.

* The value of your new place may depreciate before it appreciates if the home is in an area where home appreciation is stalled or heading downward. If you're paying cash, make sure your intended home is in an area where appreciation is on the upswing. You'd also be smart to buy where homes are priced below market value and ripe for an increase in value. Talk to a real estate agent to determine which way the market is headed. If he tells you that homes are losing value, consider saving your money and taking out a mortgage.

Phoenix Area Home Value Chart

Wow! If charts could say a million words. If you know anyone having a difficult time paying their mortgage each month, we may be able to help them. There are options! Please give is a call. We are always here to help.