Recent Developments in the Marketplace

IRS News on the Homebuyer Tax Credits

The IRS, in its most recent release, has emphasized that all taxpayers who purchase a home after November 6, 2009 and plan to claim the $8,000 first-time homebuyer tax credit or the $6,500 repeat buyer tax credit must wait until the revised IRS Form 5405 is released later this month to claim the credit. Using the existing version of the form will not work. The revised Form 5405 will have all the key instructions needed to get the homebuyer a check from the government.

The Worker, Homeownership, and Business Assistance Act of 2009 extended the deadline for qualifying home purchases from Nov. 30, 2009 to April 30, 2010. Additionally, if a buyer enters into a binding contract by April 30, 2010, the buyer has until June 30, 2010 to settle on the purchase. The first-time homebuyer credit remains at $8,000, and the new $6,500 credit for a “long-time resident” applies to buyers who have owned and used the same home as a principal or primary residence for at least five consecutive years of the eight-year period ending on the date of purchase of a new primary residence.

Some of the important new features of the amended credit program include:

• The house cannot cost more than $800,000.
• No one under 18 can claim the credit, no matter what.
• Anyone who is counted as a dependent on another taxpayer's federal tax returns is not eligible for the credits.
• Members of the armed forces, plus diplomatic and intelligence personnel who are in service in foreign countries, have until April 30, 2011 to enter into a binding contract to purchase a house and until June 30, 2011 to close on it.

The IRS also now has a YouTube video about the credits. The latest IRS guidelines and a link to the video appear at http://www.irs.gov/newsroom/article/0,,id=215791,00.html?portlet=7.

Fannie Mae Announces Deed for Lease™ Program

Fannie Mae is implementing a Deed for Lease™ Program where qualifying homeowners facing foreclosure will be able to remain in their homes by giving the lender a deed in lieu of foreclosure and then lease the home from the lender at a market rate. "The Deed for Lease Program provides an additional option for qualifying homeowners who are facing foreclosure and are not eligible for modifications," said Jay Ryan, Vice President of Fannie Mae. "This new program helps eliminate some of the uncertainty of foreclosure, keeps families and tenants in their homes during a transitional period, and helps to stabilize neighborhoods and communities.

To participate in the program, borrowers must live in the home as their primary residence and must be released from any subordinate liens on the property. Tenants of borrowers in this circumstance may also be eligible for leases under the program. Leases under the new program may be up to 12 months, with the possibility of term renewal or month-to-month extensions after that period. For additional information about the Deed for Lease Program, including full details on program eligibility, visit https://www.efanniemae.com/sf/servicing/d4l/.

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