Earlier this year Congress passed the 2009 Economic Recovery Package. In this bill, Congress included a tax credit for first time home buyers. In my last post I talked about one program for first time home buyers (HPAP) and now I’m going to talk about a federal program meant to promote home buying.
The tax credit is for up to $8,000 or 10% of the cost of the house – whichever is lower - and unlike previous similar programs, this one does not need to be repaid. So for instance if you were buying a condo for $50,000 you would qualify for $5,000, but if you were buying a townhouse for $300,000 you would qualify for the full $8,000. This is only for first time home buyers who are buying a principle residency, aka not for the house on the Bay that you’re looking to purchase, and not for other investment properties either.
There are certain qualifiers, such as the closing date must be between January 1, 2009 and December 1, 2009. Additionally, there are income qualifications. To receive the whole $8,000, you must be a single person who earns $75,000 or less, and if you’re a married couple, the income must be $150,000 or less. To get a scaled down version of the credit a single person can make between $75,000 and $95,000 and a married couple can make between $150,000 and $170,000. If you are a single person making more than $95,000 or a married couple making more than $170,000, you are not eligible for the credit.
The tax credit is applied dollar for dollar. If your tax liability is less than the amount of the credit, you can receive the full credit. However, you must own the house for three years or more with exceptions for death and divorce, otherwise, if you sell it will be captured in the selling amount.
While I'm always open to answer any questions, please consult a professional regarding specific tax issues
Friday, April 10, 2009
Wednesday, April 1, 2009
The Low Down on HPAP
You’d be surprised how many programs there are in the District of Columbia available to first time homebuyers. Many of these programs, however, are administered by different offices or non-profits and may be hard to navigate, thus making the whole process more overwhelming, stressful and complicated than it already is. Luckily, with a little research, a few phone calls, effort and of course, my expertise you can do it and together, we can find you the ideal home at the ideal price.
One of these programs is HPAP.
HPAP stands for Housing Purchase Assistance Program. This program is specific to District residents that are buying a home for the first time, and has specific requirements to qualify – both income and in some cases special locations – aka economic development zones.
Let's do some math so this all makes a little sense: [see example here].
With HPAP, depending on family size and total household income (in this case under $51,000 for an individual), borrowers can receive up to $77,00 in the form of a 0% interest loan with a life of 35 years of which, the first five years are deferred. Essentially, free money. After those first five years, the monthly payments on a loan of $77,000 would be $213.89. Note that there is a stipulation that the loan must be repaid if you sell the property.
The process for this is grueling and I recommend starting it at least six months before you wish to begin the process. There is a general information session, then you are required to set up an appointment with a counselor where your budget goes under the microscope and is scrutinized to each penny and each latte. Luckily, on these loans there is a 0% default rate. Additionally, this is what is characterized as “character based lending” where good people get houses they can afford.
A similar program is the housing assistance program is available for DC government employees, DC police officers and DC public school teachers. This program provides these qualifying individuals up to a $10,000 grant (note: grants do not need to be repaid).
Some of the organizations throughout the District that provide help are listed [here].
Be sure to research, and if you have any questions, do not hesitate to ask – I am here to help you find the home of your dreams!
One of these programs is HPAP.
HPAP stands for Housing Purchase Assistance Program. This program is specific to District residents that are buying a home for the first time, and has specific requirements to qualify – both income and in some cases special locations – aka economic development zones.
Let's do some math so this all makes a little sense: [see example here].
With HPAP, depending on family size and total household income (in this case under $51,000 for an individual), borrowers can receive up to $77,00 in the form of a 0% interest loan with a life of 35 years of which, the first five years are deferred. Essentially, free money. After those first five years, the monthly payments on a loan of $77,000 would be $213.89. Note that there is a stipulation that the loan must be repaid if you sell the property.
The process for this is grueling and I recommend starting it at least six months before you wish to begin the process. There is a general information session, then you are required to set up an appointment with a counselor where your budget goes under the microscope and is scrutinized to each penny and each latte. Luckily, on these loans there is a 0% default rate. Additionally, this is what is characterized as “character based lending” where good people get houses they can afford.
A similar program is the housing assistance program is available for DC government employees, DC police officers and DC public school teachers. This program provides these qualifying individuals up to a $10,000 grant (note: grants do not need to be repaid).
Some of the organizations throughout the District that provide help are listed [here].
Be sure to research, and if you have any questions, do not hesitate to ask – I am here to help you find the home of your dreams!
Saturday, January 3, 2009
Resolution #3- Buy a home
I love the New Year. I get more excited about the New Year than the rest of the holidays. I really get into it with a ton of rituals, including cleaning up my entire house, purging my closet, weeding out my book collection and then the most fun part- writing down my resolutions- in cursive and in a fancy journal- all before the clock strikes midnight on the eve.
New Years eve, I did not do any of my rituals. Unfortunately, The Coopster (my puppy) got really ill and had to undergo a number of stressful days at the hospital, tons of tests and emergency surgery- which had me in a frenzy. Things have calm down since, and Cooper is getting better. And, I have finally had a chance to put a little more thought into what my resolutions are this year. And for the first time, they are really uncomplicated, and much more fun and achievable. I won't bore you with the details of all my resolutions.
If one of your resolutions is to buy a house this year- I wanted to share some pointers with you:
It is never too early to start planning for the process. I love meeting a client several months before they are planning to move. Planning involves talking to a lender early enough, to strategically place yourself in the best position for the strongest financing available. There are several first time homebuyer/specialized programs that are fantastic, but that may take several months to 'process' since they are ran by the government or non-profit.
Planning also allows you to get educated on the market. Start looking at listings early. Start checking out open houses. Start watching 'tons of HGTV'.
If you are ready to take step 1 of working on your resolution, I would be happy to meet you for a coffee sometime. Let's talk!
Wednesday, December 10, 2008
Who is your neighbor....?
I got a call yesterday from a client to tell me about her new neighbor who happens to be 'Obama's speechwriter'. She was 'Tres EXCITED'. She think she might invite him over for tea. How did she find out? This article in the New York Times. Hmmmmmm.... I wonder who my neighbor's are?
(An aside- the last two weeks have been insanely busy - and it is DECEMBER! Maybe this - and the fact that interest rates went down quite a bit
Location! Location! ... Obama!
THESE days, the capital’s top real estate brokers are keeping more secrets than usual.
Or trying to, anyway.
Driving around town on Tuesday, Terri Robinson, the longtime Washington real estate agent who was responsible for selling the Clintons their $2.85-million house on Whitehaven Street, said she has seen a trickle of high-profile newcomers in the early days of December.
“I have to be discreet, you know,” Ms. Robinson said, before letting it slip that she was en route to meet a client: Jon Favreau, the chief speechwriter for President-elect Barack Obama, who was about to sign the closing papers on a luxury condominium in the Dupont Circle neighborhood.
On Wednesday, Jim Bell, a broker who deals in some of the city’s most expensive enclaves, said he had just given a tour of a six-bedroom Spanish-style house on California Street in the exclusive Kalorama neighborhood — for the wife of a very important soon-to-be Washington official.
“I can’t tell you who it was,” Mr. Bell said conspiratorially. “But it was a $3-million showing. For someone coming in from Chicago.”
He continued: “Their advance people have already been inside the house twice. Two different groups.” (The second group, he said, was the Secret Service.)
There have been a lot of potential buyers from Chicago quietly descending on Washington this month, according to real estate brokers. Multimillion-dollar homes have been snapped up in all-cash deals. First-time buyers have toured apartments in the fashionable neighborhoods of Logan Circle and the U Street corridor. Big-money donors have gone house-hunting in the upscale blocks of Kalorama and Georgetown.
Yes, change is coming to Washington — at least it in the real estate market, which is loosely segregated by both race and party, and thus subject to abrupt shifts in population every four or eight years.
Take the last eight years of Republican rule. Georgetown, for decades the fabled center of the city’s power elite, was said to have been displaced by the bucolic Virginia enclave of McLean, or “the new home of America’s ruling class,” as The New Republic put it in a 2006 cover story.
Now as the Obama Democrats begin their move to Washington, they appear to be moving the center of power back to the district. Moneyed Democrats are still attracted to Georgetown and Kalorama, young families to Chevy Chase and Capitol Hill, and 20-somethings to Adams Morgan, U Street and Logan Circle.
In the last month, there has been a sharp increase in interest in properties across the district, in both upscale and gentrifying neighborhoods, said Jim Firkser, an agent with TTR Sotheby’s International Realty.
THE surge in interest, from Democratic administration officials, diplomats, journalists and big-money donors, has given real estate agents across Washington a glimmer of hope amid a cratering national housing market.
Fred Kendrick, a broker for TTR Sotheby’s who writes a monthly housing report on Washington, said the local market had remained relatively flat all year, until sales hit a wall in October — down 20 percent from the previous October. (So far in 2008, the average single-family house in Washington sold for $682,428, down 1 percent from 2007.)
But last week saw a trickle of significant sales, including five houses in Georgetown priced from $1.5 million to $5 million.
And Mr. Kendrick predicted there would be more to come from new members of Congress and the Obama administration, some of whom have recently purchased property.
“The assistant secretaries, the undersecretaries, they’ll buy,” he said, adding that some announced Obama Cabinet nominees — Senator Hillary Rodham Clinton, for example — already own homes in Washington. “I’m thinking: ‘Please, appoint some people who don’t live here. Help us out a bit.’ ”
Some Obama advisers — Chicago transplants like Valerie Jarrett, a senior adviser, and Desirée Rogers, the new White House social secretary — are starting from scratch in Washington. (After her appointment was announced Nov. 24, Ms. Rogers said in an interview that she had not found a place to live yet.)
Rahm Emanuel, Mr. Obama’s incoming chief of staff, lives in a basement apartment on Capitol Hill but has told friends that he will shop for a house when his family relocates from Chicago in the spring.
Many Republicans who are out of official power will stay in Washington, and many incoming members of the Obama administration (Eric H. Holder Jr., Bill Burton) already have homes here.
But the younger set is settling in Melrose Place-like proximity around 16th Street in Dupont Circle, one of the city’s grander thoroughfares that also happens to lead directly to 1600 Pennsylvania Avenue, a mile away.
After a weekend of searching in mid-November, Mr. Favreau bought a condominium in the Chastleton, an eight-story Gothic-style luxury building, where Gen. Douglas MacArthur once lived. It will be a dramatic switch from his most recent housing situation, where he shared a house in Lincoln Park with other Obama staff members.
“In Chicago, we lived in a house with seven people,” Mr. Favreau said. “Everyone’s pretty much staying close together here.”
Ben LaBolt, an Obama spokesman, moved into an apartment several blocks away from Mr. Favreau. A short stretch from there is the apartment shared by Katie McCormick Lelyveld, a spokeswoman for Michelle Obama, and her boyfriend, Tommy Vietor, a spokesman for Mr. Obama.
And supporting the old real estate adage that Democrats rent and Republicans buy, a healthy number of young Obama staff members will settle into rentals. Reid Cherlin, another Obama staff member, has moved into a rental in the Dupont Circle neighborhood.
“A lot of the people who are coming in are kids,” said Pat Kennedy, a Washington broker who also writes Capital Homes, a real estate blog. “I think they’re going to be looking for rooms and group houses on Craigslist.”
One broker cited the hangers-on, Democrats who don’t work for Obama but just want to get in on the action. “Three weeks before the election, several Obama-related people, big-money supporters, started buying properties here,” said the broker, who asked to remain anonymous because the deals were confidential. “These are people who aren’t even working for the administration. They just really want to be a part of the movement and a part of this moment in time.”
While it is still too early to tell if the change in administration will have a lasting effect on the real estate market, one broker said that the last time there was such a potentially large swing was when the Republicans seized control of Congress in 1994 and the Democrats left town en masse.
“People are predicting that there are going to be 40,000 transactions,” Ms. Kennedy said. “And people who have houses on the market or are about to put them on, think the Obama people are going to be their salvation.”
But the people who may suffer the most are the Republicans who are leaving town and trying to unload their properties. After all, home prices have stalled, Ms. Kennedy said. “I do have one listing from a Bush administration official, who’s going back to California,” she said, clucking her tongue at the timing. “I guess the Bush people’s loss is the Obama people’s gain.”
NEW YORK TIMES. PUBLISHED DEC 5th by By JULIE BOSMAN
(An aside- the last two weeks have been insanely busy - and it is DECEMBER! Maybe this - and the fact that interest rates went down quite a bit
Location! Location! ... Obama!
THESE days, the capital’s top real estate brokers are keeping more secrets than usual.
Or trying to, anyway.
Driving around town on Tuesday, Terri Robinson, the longtime Washington real estate agent who was responsible for selling the Clintons their $2.85-million house on Whitehaven Street, said she has seen a trickle of high-profile newcomers in the early days of December.
“I have to be discreet, you know,” Ms. Robinson said, before letting it slip that she was en route to meet a client: Jon Favreau, the chief speechwriter for President-elect Barack Obama, who was about to sign the closing papers on a luxury condominium in the Dupont Circle neighborhood.
On Wednesday, Jim Bell, a broker who deals in some of the city’s most expensive enclaves, said he had just given a tour of a six-bedroom Spanish-style house on California Street in the exclusive Kalorama neighborhood — for the wife of a very important soon-to-be Washington official.
“I can’t tell you who it was,” Mr. Bell said conspiratorially. “But it was a $3-million showing. For someone coming in from Chicago.”
He continued: “Their advance people have already been inside the house twice. Two different groups.” (The second group, he said, was the Secret Service.)
There have been a lot of potential buyers from Chicago quietly descending on Washington this month, according to real estate brokers. Multimillion-dollar homes have been snapped up in all-cash deals. First-time buyers have toured apartments in the fashionable neighborhoods of Logan Circle and the U Street corridor. Big-money donors have gone house-hunting in the upscale blocks of Kalorama and Georgetown.
Yes, change is coming to Washington — at least it in the real estate market, which is loosely segregated by both race and party, and thus subject to abrupt shifts in population every four or eight years.
Take the last eight years of Republican rule. Georgetown, for decades the fabled center of the city’s power elite, was said to have been displaced by the bucolic Virginia enclave of McLean, or “the new home of America’s ruling class,” as The New Republic put it in a 2006 cover story.
Now as the Obama Democrats begin their move to Washington, they appear to be moving the center of power back to the district. Moneyed Democrats are still attracted to Georgetown and Kalorama, young families to Chevy Chase and Capitol Hill, and 20-somethings to Adams Morgan, U Street and Logan Circle.
In the last month, there has been a sharp increase in interest in properties across the district, in both upscale and gentrifying neighborhoods, said Jim Firkser, an agent with TTR Sotheby’s International Realty.
THE surge in interest, from Democratic administration officials, diplomats, journalists and big-money donors, has given real estate agents across Washington a glimmer of hope amid a cratering national housing market.
Fred Kendrick, a broker for TTR Sotheby’s who writes a monthly housing report on Washington, said the local market had remained relatively flat all year, until sales hit a wall in October — down 20 percent from the previous October. (So far in 2008, the average single-family house in Washington sold for $682,428, down 1 percent from 2007.)
But last week saw a trickle of significant sales, including five houses in Georgetown priced from $1.5 million to $5 million.
And Mr. Kendrick predicted there would be more to come from new members of Congress and the Obama administration, some of whom have recently purchased property.
“The assistant secretaries, the undersecretaries, they’ll buy,” he said, adding that some announced Obama Cabinet nominees — Senator Hillary Rodham Clinton, for example — already own homes in Washington. “I’m thinking: ‘Please, appoint some people who don’t live here. Help us out a bit.’ ”
Some Obama advisers — Chicago transplants like Valerie Jarrett, a senior adviser, and Desirée Rogers, the new White House social secretary — are starting from scratch in Washington. (After her appointment was announced Nov. 24, Ms. Rogers said in an interview that she had not found a place to live yet.)
Rahm Emanuel, Mr. Obama’s incoming chief of staff, lives in a basement apartment on Capitol Hill but has told friends that he will shop for a house when his family relocates from Chicago in the spring.
Many Republicans who are out of official power will stay in Washington, and many incoming members of the Obama administration (Eric H. Holder Jr., Bill Burton) already have homes here.
But the younger set is settling in Melrose Place-like proximity around 16th Street in Dupont Circle, one of the city’s grander thoroughfares that also happens to lead directly to 1600 Pennsylvania Avenue, a mile away.
After a weekend of searching in mid-November, Mr. Favreau bought a condominium in the Chastleton, an eight-story Gothic-style luxury building, where Gen. Douglas MacArthur once lived. It will be a dramatic switch from his most recent housing situation, where he shared a house in Lincoln Park with other Obama staff members.
“In Chicago, we lived in a house with seven people,” Mr. Favreau said. “Everyone’s pretty much staying close together here.”
Ben LaBolt, an Obama spokesman, moved into an apartment several blocks away from Mr. Favreau. A short stretch from there is the apartment shared by Katie McCormick Lelyveld, a spokeswoman for Michelle Obama, and her boyfriend, Tommy Vietor, a spokesman for Mr. Obama.
And supporting the old real estate adage that Democrats rent and Republicans buy, a healthy number of young Obama staff members will settle into rentals. Reid Cherlin, another Obama staff member, has moved into a rental in the Dupont Circle neighborhood.
“A lot of the people who are coming in are kids,” said Pat Kennedy, a Washington broker who also writes Capital Homes, a real estate blog. “I think they’re going to be looking for rooms and group houses on Craigslist.”
One broker cited the hangers-on, Democrats who don’t work for Obama but just want to get in on the action. “Three weeks before the election, several Obama-related people, big-money supporters, started buying properties here,” said the broker, who asked to remain anonymous because the deals were confidential. “These are people who aren’t even working for the administration. They just really want to be a part of the movement and a part of this moment in time.”
While it is still too early to tell if the change in administration will have a lasting effect on the real estate market, one broker said that the last time there was such a potentially large swing was when the Republicans seized control of Congress in 1994 and the Democrats left town en masse.
“People are predicting that there are going to be 40,000 transactions,” Ms. Kennedy said. “And people who have houses on the market or are about to put them on, think the Obama people are going to be their salvation.”
But the people who may suffer the most are the Republicans who are leaving town and trying to unload their properties. After all, home prices have stalled, Ms. Kennedy said. “I do have one listing from a Bush administration official, who’s going back to California,” she said, clucking her tongue at the timing. “I guess the Bush people’s loss is the Obama people’s gain.”
NEW YORK TIMES. PUBLISHED DEC 5th by By JULIE BOSMAN
Tuesday, October 21, 2008
Happy homeowner and their happier dog :)
Occasionally, when dealing with the first time homebuyer programs that are administered by the government or a non-profit, the process can be 'a tad bit' aggravating. However, most of the time, these are the best financing deals in town. As an agent, I have learned to keep things in perspective, remember the eventual goal, and keep calm when working on a transaction that involves these programs. And I love that my clients remembered to 'Keep Calm, and Carry On.
Here is a lovely referral from my clients- TL and ND.
When my partner and I met Atieno, I was just starting to warm up to the idea of purchasing a home—it seemed like such a big responsibility. And, we had some serious hurdles to jump: our liquid assets were minimal after paying off debts; we didn't want a lot of out-of-pocket expenses at closing to ensure we had a buffer should something go wrong; we had a price range that was a squeeze considering our very specific needs including a central location in the DuPont/Logan/U St area; my partner's wants were very different than mine, if not contradictory; and, we were scared to leave our home and neighborhood in the West End after four years of residence.
These were just some of our many concerns. Ati took on us and all of our challenges—I would be the first to say how scary it must have been. She dedicated the time up-front to learn about all of our needs and wants. As a result, the first condo on our second day out, she hit the nail on the head. She found a place on which my partner and I somehow both agreed, which lived up to our picky expectations. And, it had several bonuses: a wood burning fireplace, a courtyard, a private back patio, and an extra 250 sq ft.
When the real problems cropped up with financing(we were looking to get a complicated loan in the midst of the largest financial crisis of our lives), my partner and I were tense and frustrated trying to keep things moving along—trying to manage tight deadlines, our landlord, work responsibilities, and a week-long trip out of the country. Ati worked through our many complications and even our own meltdowns as we tried to figure it all out. It wasn't long before she kept repeating the somewhat unknown motto of King George VI during World War II, "keep calm and carry on". She lightened things up in the midst of drama, maintaining her wits, humor and calm while providing an ear to listen and words of wisdom.
In the end, it all worked out near seamlessly. The seller paid our closing costs. Through the DC Bond program Ati suggested, we were able to obtain a down payment. We kept our cash in hand. Now, just two short months from where this all started, we have settled into our gorgeous new condo in Logan. We have already begun to make it our own. Our Chihuahua puppy is enjoying the courtyard. We are looking forward to utilizing the fireplace throughout the winter and the private patio in the summer. The neighbors are friendly and welcoming. We couldn't be happier!
We have Ati to thank for changing our lives for the better. She not only walked us through the seemingly impossible process, she nudged us when we had trouble making decisions. She listened to our concerns. She made sure we were always comfortable. And, most importantly, she got us a home and investment for our future. I am pleased to consider Ati not only my agent and real estate mentor, but my friend.
Monday, October 20, 2008
How to raise your credit score
The folks at Money Magazine put together this great article on credit scores. Check it out:
To borrow as cheaply as possible, it helps to nudge your score from good to fabulous. Hoisting your number from 650 to 770 can save $3,100 a year on a 30-year, $300,000 mortgage.
Here's how your score is sliced and diced - and how to kick it up a notch. Remember: The bigger the slice, the more it affects your score.
- 35% Your payment history Pay your bills on time. Automating payments online can help.
- 30% How much you owe Keep balances on credit cards and other revolving accounts below 50% of your credit limit (lower is better).
- 15% Length of your credit history Rather than let old cards go dormant, charge a latte a month (then pay it off). No activity lowers your score.
- 10% Your new credit Don't open unnecessary new accounts. And if you're rate shopping for a mortgage or an auto loan, do it within two weeks; multiple requests could ding your score.
- 10% Your mix of loans You can't do much to change this (except get a credit card if you don't have one).
- Bonus Request a free copy from each of the three major credit-reporting agencies at annualcreditreport.com. Then tell them about any mistakes you find that are not in your favor.
Wednesday, October 15, 2008
Showing Instructions
Every so often there is something really funny on the Multiple Listing Service (MLS). Most of the time it is a really poorly worded, or the spelling is atrocious. For some reason, folks CANNOT spell the word STRICTLY. (always misspelled STRICKLY/STRICLY!) Sometimes the person just plain failed out of grammar school- like this posting that I borrowed from fellow realtor buddy's blog- James Downing:
Today, I saw yet another 'strange but funny' entry in the agent's remarks on an MLS listing:
REMARKS
General/Agent:
There are 2 small dogs-1 in kennel, 1 roaming free. Free 1 is "Jack." When you enter the condo, acknowledge Jack by saying his name and act like you know him. Take a milk bone from the box on your right as you enter, drop it on the floor and say, "Good boy Jack." He will follow you around. Don't pet him, just ignore him after that or say, "you're a good boy, Jack." Ignore the one in the kennel.
That's it.... no details on the condo listed.
Hmmmmmm..... I wonder if Jack's for sale.
| REMARKS | |||
| General/Agent: | |||
| Very clean and shine condo for a piggy buyer, totally renovated and new appliance: stove, ground count, 2 sinks, dishwasher, microwave , wall to wall paint and fresh, molding, 2 bedrooms, new a/c school and bus stop cross the street, and more. Show and sale | |||
Today, I saw yet another 'strange but funny' entry in the agent's remarks on an MLS listing:
REMARKS
General/Agent:
There are 2 small dogs-1 in kennel, 1 roaming free. Free 1 is "Jack." When you enter the condo, acknowledge Jack by saying his name and act like you know him. Take a milk bone from the box on your right as you enter, drop it on the floor and say, "Good boy Jack." He will follow you around. Don't pet him, just ignore him after that or say, "you're a good boy, Jack." Ignore the one in the kennel.
That's it.... no details on the condo listed.
Hmmmmmm..... I wonder if Jack's for sale.
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