If you've been following the news, you are probably aware that one of the most important drivers for our region's and nation's economic recovery and greatest boons for new homebuyers has been the federal American Recovery and Reinvestment Act of 2009 and the California Homebuyer Tax Credit.

The U.S. government's tax credit program showed so much success early on that the U.S. Department of Housing and Urban Development (HUD) announced in May that the Federal Housing Administration (FHA) will allow state housing finance agencies to provide second mortgages 'monetizing' the tax credit so that borrowers can use the funds for upfront costs for the purchase of homes with FHA-insured mortgage loans. What this means is, prospective first-time homebuyers who qualify for the $8,000 tax credit may get a loan to help cover downpayment or closing costs.

Because home buyers who go directly to FHA - approved lenders still need to come up with the 3.5 percent minimum downpayment that is required for an FHA-insured loan, FHA - approved lenders can purchase the tax credit from the home buyer in advance, so that the home buyer can use the funds for closing costs or make a downpayment in addition to the 3.5 percent minimum. The new FHA monetization program is expected to result in an additional 40,000 home sales, many of which will be made to trade-up buyers who have been able to sell their existing home to a first-timer.

The California tax credit is also performing far better than lawmakers expected. Largely because of this tax credit, California new housing markets are showing distinct improvement and builders, contractors and construction workers are back on the job. However, because of it's success in jumpstarting the economy, the program is expected to run through its allotment of money before the anticipated deadline of March 2010.

After just three months, the California Franchise Tax Board reports that close to 90 percent of the credits have been claimed as of June 10. Homebuyers are clearly responding to this state incentive. Since the program took effect in March of this year, home-shopper traffic around the state has increased over 80 percent in some places, sales of new homes have doubled and building permits for new homes are on the rise.

It's estimated that for every new home built, three new, permanent jobs are created. So, as construction returns to California appliance and furniture manufacturers, not only are building professionals returning to work, so are those in the related fields such as transportation, insurance, retail and government staffs.

To keep this successful state tax credit program going, the BIA is working with California lawmakers to extend the program. As of this writing, AB 765 (Caballero and Solorio), SBX38 (Calderon) and SB 49 (Dutton) would all extend the $10,000 state tax credit for the purchase of a new home if passed.

If you are in the market for a state - of - the - art new home here in San Bernardino County, check out these new developments to help as many Californians as possible to finally achieve their American Dream of homeownership. Mortgage rates are still hovering at historic lows, home sales have increased yearover- year for 11 consecutive months and even though for the first time in a year median home sales have begun to rise, San Bernardino County is still the most affordable region is Southern California.

You'll find information from the state Franchise Tax Board at www.ftb.ca.gov/individuals/New_Home_Credit.shtml. In addition, the National Association of Home Builders (NAHB) now includes a frequently asked questions (FAQ) sheet on their www.federalhousingtaxcredit.com web page.

Comments (0)

Subscribe to this comment's feed

Write comment

Email Name Website		Comment smaller | bigger
		I have read and agree to the Terms of Usage. Write the displayed characters Add Comment Preview