Federal Tax Credit Used as Down Payment

At last week’s NAR Mid-Year Conference in Washington, HUD Secretary Shaun Donovan, said that the Federal Housing Administration (FHA) is going to permit its lenders to allow home buyers to “monetize” the $8,000 tax credit for first-time home buyers, to be used as a down payment. In his remarks to Realtors, Secretary Donovan indicated that details of this plan will be released shortly. This is an excellent move that further aids first-time buyers in their pursuit to purchase real estate as many first timers simply have not saved enough money to afford the lender required down payments. See the rest of the federal tax credit used as a down payment article.

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Nashville Mortgage Rates Still Under 5%

Freddie Mac reports a slight rise in the 30-year fixed mortgage rate to 4.86 percent during the week ended May 14 from 4.84 percent the previous week. The 15-year fixed mortgage rate inched up to 4.52 percent from 4.51 percent. Meanwhile, the five-year adjustable mortgage rate slipped to…read the entire Nashville mortgage rates under 5% article.

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Another Tax Credit for First Time Home Buyers

Earlier this year, Congress passed the American Recovery and Reinvestment Tax Act of 2009 (”2009 Tax Act”). In division B, Title I, Section 1006, there is a provision for a First Time Homebuyer Tax Credit (Form 5405) up to $8,000 or 10% of the purchase price. This act provides for an exception for principal residences purchased between January 1, 2009, and November 30, 2009, which enables a first time homebuyer to receive the tax credit with no repayment required if…read the rest of the tax credit for first time home buyers story.

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Nashville Mortgage Rates Hit Record Low

mortgage rates chart

With the Federal Reserve planning to purchase another $750 billion in mortgage-backed securities and up to $300 million in Treasuries, Freddie Mac reports a drop in long-term mortgage rates. The average interest on a 30-year loan fell to a 38-year low of 4.85 percent during the week ended March 26 from 4.98 percent the prior week…see the rest of the Nashville mortgage rates hit another new record low article.

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First Time Home Buyers Tax Credit Explained

First Time Home Buyers – $8,000 first-time home buyers (or if you have not owned a home in 3 years) tax credit for qualified home purchases in 2009. This tax credit is specifically designed to encourage prospective home buyers to get off the fence.

What is the tax credit?

  • Does not have to be repaid, it is a true credit
  • Is fully refundable
  • Will remain in effect until Dec. 1, 2009 so that consumers can utilize it during the critical summer and fall home-buying months
  • Allows tax credit home buyers to participate in the mortgage revenue bond program
  • Permits state housing finance agencies to help buyers at closing by advancing the credit amount as a loan using tax-exempt bond proceeds

Other Key components that the legislation will create:

  • Help home borrowers by restoring the higher 2008 FHA, Fannie Mae and Freddie Mac loan limits through the end of this year (the limit will return to $729,750 from the current $625,500 in the highest cost markets, and will also rise in many other areas because the 2008 maximums were based on a more generous formula and, for most areas, higher median prices)
  • Temporarily allow exchange of Low-Income Housing Tax Credit allocating authority for tax-exempt grants and it appropriates $2 billion in HOME funding for affordable housing projects
  • Provide up to a 10-year deferral of tax due to business debt restructuring
  • Expand the net operating loss carry-back period from two years to five years for small businesses (businesses with average gross receipts of no more than $15 million over the prior three years) for losses arising in tax year 2008
  • Extend the 25C existing home remodeler credit through the end of 2010, increase the credit rate from 10% to 30%, raise the lifetime cap from $500 to $1,500 and expand the set of qualifying property
  • Provide an Alternative Minimum Tax patch for tax year 2009
  • Increase bonus depreciation and Section 179 small business expensing for business investment in 2009

This tax credit is available to you whether you purchase your property at a real estate auction, through a Realtor or on the private Nashville real estate market.

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Developers of The Braxton Are Sued

This article was published in The Nashville Post on February 20th. It is entitled, “Waterfront condo buyers want earnest money back”:

Nine pre-sale buyers of condos in the Harpeth Shoals (The Braxton) waterfront development in Ashland City yesterday filed suit against The Braxton LLC, the firm behind the condos and one of several companies run by developer John T. Rankin, who has listed debts of $73.2 million in his personal bankruptcy.

Suing in Nashville’s federal court, the would-be homeowners claim their units still are not ready, months after a contractual closing date of August 4, 2008. They also say Rankin promised them Harpeth Shoals would include destination attractions such as a restaurant and retail shops, none of which have come to pass. They are asking for the return of their earnest money – a total of just under $400,000 – plus other damages.

A copy of the complaint is available at this link. Philip Byron Jones of Evans, Jones & Reynolds in Nashville represents the plaintiffs.

Rankin has recently tried to withdraw the Chapter 7 bankruptcy filing he personally made late last year, acting “pro se” (without an attorney). As mentioned in The City Paper’s “Headline Homes” column this month, the bankruptcy court had permitted a lender to foreclose on his massive house in Hill Place, taking title to it for $1.66 million after it was on the market for $3.75 million last year.

Representatives of the bankruptcy trustee, opposing Rankin’s motion for dismissal, claimed in court filings that he had been “recalcitrant” in dealing with them and that his case did not pass the “smell-test.”

Rankin attributed his mistakes in handling the case to “pro se fumbling.” Shortly before the court denied his motion to dismiss last month, he sent notice that he “no longer has a home address.”Attempts to reach Rankin today have been unsuccessful.

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