$8000 at closing Fed tax rebate, not Wisconsin?

[Russ Jerome]

So we're all familiar with the first time home buyers tax credit for this year, originaly at the end of the year and now it can be used at closing for first time buyers.

I've got a mortgage guy says "not in wi"....WTF? is he just not set up for the monetized credit or is Wi all screwed up? Nothing I see online says wi wont support the fed's plan?

Anybody here use the credit at closing yet?

[-stew-]

Subscribing...

[Yooformula]

I thought it was always a fed tax rebate for first time buyers only, I never heard of a state restriction.

[Russ Jerome]

Thats what I have read everywhere:
http://www.realestatebymac.com/bin/web/real_estate/AR110619/NEWSLETTER/DISPLAY/NL1/LIDGAD191877/AR110619/1245698585.html

This lender is blind or just not aproved to the monetized bridge loan is all I can figure? Been searching for the last hour and see no state restriction.

[Russ Jerome]

Subscribing...

v., -scribed, -scrib·ing, -scribes.

v.tr.
To pledge or contribute (a sum of money).
To sign (one's name) at the end of a document.
To sign one's name to in attestation, testimony, or consent: subscribe a will.
To authorize (someone) to receive or access electronic texts or services, especially over the Internet.


Wisconsin is not subscribing to monetization?

[Irish]

Maybe he meant he is subscribing to the thread?

[-stew-]

v., -scribed, -scrib·ing, -scribes.

v.tr.
To pledge or contribute (a sum of money).
To sign (one's name) at the end of a document.
To sign one's name to in attestation, testimony, or consent: subscribe a will.
To authorize (someone) to receive or access electronic texts or services, especially over the Internet.


Wisconsin is not subscribing to monetization?

I'm subscribing to the thread. As this thread is...

http://i57.photobucket.com/albums/g227/Valigarmander/Random%20Crap%202/1200421712356.jpg

[Russ Jerome]

Cool I look forward to your input, Im still searching and making calls.

[Exitspeed]

He's wrong. There is no WI restriction. Period.

/thread


*I work for Shorewest*

[Russ Jerome]

Its "illegal" to get the money at closing in Wisconsin, hate this city and hating the state more and more every day.

This was from yet another mortagage lender, Coldwell Banker's legal advisor himself. You can amend your 2008 tax return but you still will not see the money for your closing before Dec 1st 2009.

[Exitspeed]

Its "illegal" to get the money at closing in Wisconsin, hate this city and hating the state more and more every day.

This was from yet another mortagage lender, Coldwell Banker's legal advisor himself.

But no you can get it at closing. You have to file for it. Do you neeeeed it at closing?

[Russ Jerome]

He's wrong. There is no WI restriction. Period.

/thread


*I work for Shorewest*

I have several houses lined up, lets buy one today!

[Irish]

Hate this city and hating the state more and more every day.

Agreed.

[Exitspeed]

I have several houses lined up, lets buy one today!

My wife is an agent. You can talk to her. I work at the corp office (I don't sell houses). If you want her info to contact her I can pm it to you. She can answer every last question you have without a doubt.

[Russ Jerome]

Every seller says it is available, just hung up with the 3rd finacer who says it cant be done at closing. If she says you can I'll give her $1000 tip when we are done. Yes I do need the money at closing, reality is you need far more than Obama thinks we need to close (not 3.5%). Shoot me her info, Im anxious to flee Milwaukee.

[PureSound15]

First - the FHA program is confusing as hell. Even on the FHA site - links send you to outside pages and information?

Second - Exitspeed is correct

Third - depending on the lender, they love the program or hate it. You found a guy that hates it.

[Exitspeed]

Every seller says it is available, just hung up with the 3rd finacer who says it cant be done at closing. If she says you can I'll give her $1000 tip when we are done. Yes I do need the money at closing, reality is you need far more than Obama thinks we need to close (not 3.5%). Shoot me her info, Im anxious to flee Milwaukee.

I'm not sure about the money at closing. I'll pm you her info now and she can let you know for sure.

[Russ Jerome]

Cool my number is public info to any lenders 414 839 2855.

I'd love to here from anybody who knows a good broker who is informed and you trust.

[PureSound15]

May 29, 2009

MORTGAGEE LETTER 2009-15


TO: ALL APPROVED MORTGAGEES

SUBJECT: Using First-Time Homebuyer Tax Credits

The American Recovery and Reinvestment Act of 2009 (Recovery Act) provides for as much as an $8000 tax credit to qualified first-time homebuyers. FHA supports this important initiative to promote homeownership. This mortgagee letter provides:
• Basic information on the first-time homebuyer credit obtained from the Internal Revenue Service (IRS) website. Complete information on how the first time homebuyer tax credit works, including the eligibility requirements for the tax credit, the amount of the tax credit that a first-time homebuyer may be eligible to receive, and how a homebuyer may claim the tax credit is available on the IRS website at http://www.irs.gov/newsroom/article/0,,id=204671,00.html?portlet7.
• Guidance on how FHA-approved mortgagees and FHA-approved nonprofit organizations as well as Federal, state, and local government agencies or instrumentalities may assist homebuyers that are eligible for the tax credit.
I. About the First-Time Homebuyer Tax Credit

Please check the IRS website to ensure you have up-to-date information. A brief overview of the tax credit from the IRS website and a copy of IRS Form 5405 (including instructions) are attached for reference.

Pursuant to 31 U.S.C. 3727 and 26 U.S.C. 6402, a refund of the first-time homebuyer credit will be made by the IRS only to the taxpayer, not to a third party. In other words, any refund issued in response to a claim for this credit cannot be assigned by a taxpayer to a third party.
II. FHA Tax Credit Guidance

Secondary Financing

Consistent with existing FHA policy, FHA will permit entities covered by Section 528 of the National Housing Act to use the current authority to offer tax credit advances with second liens in a manner consistent with the requirements in 12 U.S.C. 1709(b)(9). Eligible government agencies and instrumentalities of government are described in handbook HUD-4155.1 5.C3 and 5.C4.


Conditions:
• The tax credit advance, when combined with the FHA-insured first mortgage may not result in cash back to the borrower.
• The second lien may not exceed the total amount needed for the down payment, closing costs, and prepaid expenses.
• Secondary financing may be “soft” (silent) or require a monthly repayment.
• If payments are required, they must be included within the qualifying ratios and, when combined with the first mortgage, cannot exceed the borrower’s reasonable ability to pay.
• Payments must be deferred for at least 36 months to not be included in the qualifying ratios.
• If the tax credit advance loan has a short term for repayment, it must also provide that if the borrower fails to repay by the designated deadline, principal and interest payments begin automatically or the loan converts to a “soft” second.
• The secondary financing may not require a balloon payment before ten years.

Purchase of Tax Credit

FHA-approved mortgagees and FHA-approved nonprofit organizations as well as Federal, state, and local governmental agencies and instrumentalities thereof may purchase the tax credit anticipated by the homebuyer.

Conditions:
• The proceeds of the sale of the tax credit may not exceed the anticipated tax credit due the homebuyer based on the computations of form IRS 5405;
• The borrower must submit a signed certification that the tax credit is not subject to offset due to other indebtedness.
• A copy of the borrower’s tax refund and/or the IRS 5405 must be collected and retained in the FHA case binder.
• Any costs attendant to the purchase of the tax credit are to be nominal and discounting the anticipated credit to cover the costs and expenses of the transaction must be reasonable and disclosed to the homebuyer. In FHA’s view, fees and costs that total more than 2.5% of the anticipated credit are considered excessive. (Example: $6000 to be refunded, with all fees and costs discounted, borrower should receive not less than $5850.00 for sale of tax credit.)
• Pursuant to 12 U.S.C. 1709(b)(9), the homebuyer’s downpayment required for eligibility for FHA insurance may not consist of any funds (including funds derived from a sale of the homebuyer tax credit) provided by the mortgagee, the seller, or any other person or entity that financially benefits from the transaction (or by any third party or entity that is reimbursed, directly or indirectly, by the financially benefiting person or entity). Accordingly, the proceeds of the sale of the tax credit to FHA approved mortgagees, the seller, or any other person or entity that financially benefits from the transaction (or any third party or entity that is reimbursed, directly or indirectly, by the financing benefiting person or entity), may not be used to meet the 3.5% minimum downpayment, but may be used as additional downpayment, buying down of interest rate, or other closing costs.

Due Diligence
FHA expects that entities purchasing tax credit assets will employ appropriate due diligence measures including, but not limited to:
• Require the homebuyer to draft and provide the IRS form 5405 “First-Time Homebuyer Credit.”
• Contact the borrower’s employer and review pay stubs to confirm there are no outstanding garnishments.
• Review the homebuyer’s credit report to ensure there are no unpaid student loans, or other obligations that could be offset against the credit.
• Validate that all of the eligibility requirements for the tax credit are fulfilled
• Review previous tax returns and IRS tax assessment letters, if any, to determine that the borrower does not have unsettled obligations to the IRS

III. Monitoring

In order to track the tax credit monetization activities, FHA will require FHA-approved mortgagees to input into FHA Connection the following data:
• Name and EIN of the party who purchased the tax credit,
• The amount of the anticipated credit, and
• The amount the homebuyer paid for the monetization services.

The lender must also collect and maintain in the FHA case file the documentation that validates all of the tax credit monetization data submitted via FHA Connection.

FHA will monitor the purchase of tax credit transactions closely. Charging of excessive fees or costs in the purchase of the tax credit or increasing other fees or charges in the transaction without FHA approval may result in referral to the Mortgagee Review Board, and particularly with respect to entities that are not FHA-approved mortgagees, referral to the Federal Trade Commission, or referral to the appropriate State Attorney General office, as may be applicable.

If you have any questions regarding this mortgagee letter, please call FHA’s Resource Center at 1-800-CALL-FHA (1-800-225-5342). Persons with hearing or speech impairments may access this number via TDD/TTY by calling 1-877-TDD-2HUD (1-877-833-2483).



Sincerely,




Brian D. Montgomery
Assistant Secretary for Housing-
Federal Housing Commissioner

Attachments

IRS Form 5405


IRS Tax Credit Summary

[Exitspeed]

I did just talk to her and she said NO you can't get it at closing. You get it when you file your taxes.

[PureSound15]

Oops forgot this -

If You Wish To Use The $8000 Tax Credit For A Down Payment or Closing Costs:

If you are planning on using the 8000 tax credit for part of your down payment or closing costs, be ready for these things to happen when getting your file ready:

You will be required to complete the IRS Form 5405
The lender will contact your employer and review your pay stubs to confirm there are no outstanding garnishments
The lender will ensure that you have no unpaid student loans or other debts that could offset the 8000 tax credit – including IRS debts
The lender will have to validate that all requirements to receive the tax credit have been met



I work for a credit union - this is the information I was provided with from HUD. Russ - for the FHA program - your downpayment can be gifted. SO - 99% of our borrowers borrow money from a relative with the obligation of paying them back when they recieve the credit (if going the standard route).

I personally have not seen a loan come through where they worked with FHA to get the money up front.

What I do see is - some credit union (my understanding is that the organization has to be not-for profit) are giving you the 8k up front by utilizing a 5 year ARM (ouch). So you can pay it off when you get your return - risky for you and the CU.

SO in general. It's all very NOT black and white - incredibly confusing and exsisting without detail and gargantuan amounts of information.

[Russ Jerome]

It sounds like its a Wisconsin legislation issue, talked to enough people who have agreed on the lending side and now as well on the selling side.

I've got a crisp $100 for anybody who points me in the direction of a lender who can play the system, cash to you at closing :)

[Matchew]

I bought a House in June and Was NOT able to get the $8000 for a down Payment.... so I was going to use what i had and then the Banker gave me a Better(best Deal Ever) Deal....

Talk to my accountant and told him that I was buy and House in June and he told me to bring all the Closing Paper work in after I get everything for the lending company and he will be able to get my $8000 in 3-4 Weeks. Took it in on the first on July and got my check from the Gov. on got july 27 just under 4 weeks. and it didnt Cost me anything my accountant did it for a house warming gift. NOTE I been using the same accountant for the past 17+ Years.

[animal]

Or make it easy for yourself... borrow the 8 grand from someone first (family or friend) in hush hush fashion, deposit it in advance, then buy your house, then pay them back with the 8k tax refund check when you amend your 2008 taxes after buying. Note: Your lender doesn't 'want' to know "borrowed" that 8k from family or friend. It's an easy way to do it if you have someone with a cash reserve around. Just make sure in advance that you actually qualify for the credit of course.

[PureSound15]

Or make it easy for yourself... borrow the 8 grand from someone first (family or friend) in hush hush fashion, deposit it in advance, then buy your house, then pay them back with the 8k tax refund check when you amend your 2008 taxes after buying. Note: Your lender doesn't 'want' to know "borrowed" that 8k from family or friend. It's an easy way to do it if you have someone with a cash reserve around. Just make sure in advance that you actually qualify for the credit of course.

Totally legal under the FHA program anyway - definitely the easiest route as long as you know someone that can go a few months 8k short without a problem.

[animal]

Totally legal under the FHA program anyway - definitely the easiest route as long as you know someone that can go a few months 8k short without a problem.

I didn't say it was illegal, but if that 8k is being used to be part of the minimum downpament then that's supposed to be "unborrowed" (maybe FHA loans are different). Very hard to prove you borrowed it anyways, but better them just thinking you had 8k stashed away and they won't give you the "business" over it.

[SSLEVO]

Oops forgot this -

If You Wish To Use The $8000 Tax Credit For A Down Payment or Closing Costs:

If you are planning on using the 8000 tax credit for part of your down payment or closing costs, be ready for these things to happen when getting your file ready:

You will be required to complete the IRS Form 5405
The lender will contact your employer and review your pay stubs to confirm there are no outstanding garnishments
The lender will ensure that you have no unpaid student loans or other debts that could offset the 8000 tax credit – including IRS debts
The lender will have to validate that all requirements to receive the tax credit have been met



I work for a credit union - this is the information I was provided with from HUD. Russ - for the FHA program - your downpayment can be gifted. SO - 99% of our borrowers borrow money from a relative with the obligation of paying them back when they recieve the credit (if going the standard route).

I personally have not seen a loan come through where they worked with FHA to get the money up front.

What I do see is - some credit union (my understanding is that the organization has to be not-for profit) are giving you the 8k up front by utilizing a 5 year ARM (ouch). So you can pay it off when you get your return - risky for you and the CU.

SO in general. It's all very NOT black and white - incredibly confusing and exsisting without detail and gargantuan amounts of information.

So in a nutshell, if i have a student loan i can't get the money for a downpayment? Even so you haven't seen anyone actually get the money for a downpayment? It sounds like a nice idea but the downpayment is what stops most people from buying, myself included. So to offer this 8k as a tax rebate doesn't help half as much as it could as a downpayment would.

[lordairgtar]

I did just talk to her and she said NO you can't get it at closing. You get it when you file your taxes.
Why does Wisconsin do that? Does Doyle need that money in the state coffers earning interest?

[95mustang302]

The only way to "GET IT" at closing is if you are using FHA financing, and then you still don't get it. The lender basically "lends" you the 8k for down payment at closing, when you file your amended 2008 return, or wait till 2009 (either way) you will have to sign that 8k back over to the lender.

[Russ Jerome]

Why does Wisconsin do that? Does Doyle need that money in the state coffers earning interest?

Im not conviced after talking to people all day it is a Wi thing, although I wouldnt be surprised if so. Im "guessing" Obama had a cool idea (oddly enough) and it got all balled up amongst all the millionair senate and house folks who have no idea why us pesants need downpayment money and added all the clause's.

One thing is for sure, without 12 months of planning thru your tax's you are NEVER going to be able to use the 8k as a downstroke like all the PR says you can. Obama: Fail again.

[95mustang302]

Thats why you amend your 2008 return to recoupe the money

[animal]

Thats why you amend your 2008 return to recoupe the money

^^ and that's why you just borrow it from someone you know for a few weeks until you can amend and get the money.

[95mustang302]

^^ what he said!!

[Russ Jerome]

^^ and that's why you just borrow it from someone you know for a few weeks until you can amend and get the money.

That sure sounds easy, everybody I know has 8 G's laying around :) Seriously I expect to have the minimum downstroke for my aproval amount but the whole "available at closing" sure would make life easier.

If you want to make 2 grand easily, loan me 6 and you can have the whole 8 in a few weeks....sounds too easy doesnt it :)

[95mustang302]

Just don't over extend yourself, its pointless to get yourself into a house you can't afford just to get 8k

[animal]

That sure sounds easy, everybody I know has 8 G's laying around :) Seriously I expect to have the minimum downstroke for my aproval amount but the whole "available at closing" sure would make life easier.

If you want to make 2 grand easily, loan me 6 and you can have the whole 8 in a few weeks....sounds too easy doesnt it :)

I'd do it, but I spent my free 8 grand already :goof

Maybe you could look at a 401k loan for it then pay it off right away once you get the coin?

[05caddyext]

Just borrow the money from the bank. They consider that tax credit as collateral. Many people actually take a loan out for the down payment on their home. Also, depending on where the house is located you may qualify for a rural housing loan which has no down payment required at all. There is a 2% fee for using this type of loan, but that entire amount can be rolled into the loan itself.

[-stew-]

Did any one gain any further info on using the credit as a down payment?

[pOrk]

You can get it early, but not at closing.


That sure sounds easy, everybody I know has 8 G's laying around :) Seriously I expect to have the minimum downstroke for my aproval amount but the whole "available at closing" sure would make life easier.

If you want to make 2 grand easily, loan me 6 and you can have the whole 8 in a few weeks....sounds too easy doesnt it :)

If you are serious, PM me.

[pOrk]

Also to add to that, do NOT get an FHA loan if you have good enough credit to go with a conventional loan. Conventional loan will get you a better interest rate and you still get the 8k obamabucks

[URLOZIN]

Also to add to that, do NOT get an FHA loan if you have good enough credit to go with a conventional loan. Conventional loan will get you a better interest rate and you still get the 8k obamabucks
I got an fha loan @ 6.0%. I didn't think that was too bad. My local credit union was telling me 6.5%.

[pOrk]

I got an fha loan @ 6.0%. I didn't think that was too bad. My local credit union was telling me 6.5%.

When did you close? Mine is 5.25% and I closed on July 29th

[Russ Jerome]

Im set up at 5.5% FHA if I get this done this by Oct.

[95mustang302]

I got 5.25 conventional and closed a little over a week ago

[Yooformula]

my fha/first time buyer loan with no money down was only 5.65% but that was over 4 years ago.

[pOrk]

I got 5.25 conventional and closed a little over a week ago

:thumbsup I wish I coulda took advantage of that 4.85 2 months ago :wow I am happy with 5.25 though

[Yooformula]

:thumbsup I wish I coulda took advantage of that 4.85 2 months ago :wow I am happy with 5.25 though

I am sure you'll be even happier with that tax credit too:goof

[Russ Jerome]

They are campaining to lengthen and RAISE the credit:
http://realtytimes.com/130/Nancy_Walker
Its been idle rumor but my Mom works for Wells Fargo main in MPLS and its daily talk now.

[URLOZIN]

I closed August 14th

[05caddyext]

I got 5.5% and I close on sept 22. Was at 5.75 for a while, went back down a little when I locked in. Rates change daily.