You hear it all the time. “There’s never been a better time to buy.”

But this time, it could be true!

There are many options available to a new homebuyer today. Yes, gone are the days of 100% financing where we wrapped our down payment and all of our closing costs into our mortgage loans. But this is good news! None of us want to have a monthly payment higher than we can afford, do we?

What we have instead are some incentives that will help many new buyers realize the American dream of owning a home of their own.

Here at Prudential Idaho Realty we are Realtors, not loan officers. We have outlined some financing options available to today’s homebuyers, but strongly encourage any potential homebuyer to consult with a mortgage loan professional and/or an attorney.

$8,000 Tax Credit (as amended by the American Recovery and Reinvestment Act of 2009)

While the proposed $15,000 homebuyer tax credit died in negotiations between the House and the Senate, the $787 billion stimulus bill that President Obama signed into law includes a similar-albeit smaller-measure designed to help revive the real estate market. Here are a few things you need to know about the freshly-enacted $8,000 first-time homebuyer tax credit.

The tax credit is for first-time home buyers only (anyone who hasn’t owned a personal residence in the previous three (3) years.)

• 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.
• You claim the tax credit on your federal income tax return. Specifically, home buyers should complete IRS Form 5405 to determine their tax credit amount, and then claim this amount on Line 69 of their 1040 income tax return. No other applications or forms are required, and no pre-approval is necessary. However, you will want to be sure that you qualify for the credit under the income limits and first-time home buyer tests.
• The law allows taxpayers to choose to treat qualified home purchases in 2009 as if the purchase occurred on December 31, 2008. This means that the 2008 income limit (MAGI) applies and the election accelerates when the credit can be claimed (tax filing for 2008 returns instead of for 2009 returns). A benefit of this election is that a homebuyer in 2009 will know their 2008 MAGI with certainty, thereby helping the buyer know whether the income limit will reduce their credit amount.
• Taxpayers buying a home who wish to claim it on their 2008 tax return, but who have already submitted their 2008 return to the IRS, may file an amended 2008 return claiming the tax credit. You should consult with a tax professional to determine how to arrange this.

New FHA/VA Guidelines, effective February 23, 2009

Effective today, February 23, 2009, FHA and VA loans where only one occupying borrower has a credit score are now eligible for purchase.  The minimum credit score will still be 620.

Listed below are several scenarios which provide additional clarification:

• Two or more occupant borrowers with no credit scores: Ineligible for purchase.
• One occupant borrower with a credit score and one occupant borrower without a credit score: Eligible for purchase. The reported credit score is used for qualification and non-traditional credit does not need to be built for the borrower with no credit score.
• Occupant borrower with no credit score and a non-occupant borrower with a credit score: Ineligible for purchase since the occupant borrower would be required to build non-traditional credit which is no longer acceptable
• Occupant borrower with a credit score and a non-occupant borrower without a credit score: Eligible for purchase. The occupant borrower’s credit score is used for qualification.

HomePath Mortgage Financing

This special financing is available on Fannie Mae homes with the following logo:

The benefits include:

• Low down payment and flexible mortgage terms (fixed-rate, adjustable-rate, or interest-only)
• You may qualify even if your credit is less than perfect
• Available to both owner occupiers and investors
• Down payment (at least 3 percent) can be funded by your own savings; a gift; a grant; or a loan from a nonprofit organization, state or local government, or employer
• No mortgage insurance*
• No appraisal fees
• Also eligible for HomePath Renovation Mortgage (see details below)
• HomePath Mortgage financing is available from a variety of lenders – both local and national.

Rural Development Guaranteed Loans (through Bank of America)

For buyers who are interested in purchasing property in approved rural communities (Star, Kuna, Middleton, Homedale, Wilder, Parma, Fruitland, and areas of Ada, Boise, Canyon, Gem and Owyhee counties), this loan program is one of the only 100% financing options available today. Borrowers’ income cannot exceed $70,750 annually and buyers must meet qualifying ratios and credit standards of Bank of America.

Benefits include:

• 100% Financing (No Down Payment required)
• Loan may include closing costs and prepaids
• Sellers may contribute to buyers closing costs
• No requirement to be a 1^st time homebuyer
• No PMI or MIP mortgage insurance
• No prepayment penalty
• 30 year fixed rates
• No purchase limits