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Dissecting Obama’s first home buyer tax credit (for mobile homes)

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New legislation is always met with skepticism and sometimes excitement, especially on the delicate subject of home ownership in America. With the first time home buyer tax credit, at first glance, what you see is what you get.

In this blog post, I will be trying to lift the veil to show the average American what it means to him or her. This is not a complete description or analysis, and you should speak to your real estate agent and/or broker before making any decisions. Below, I answer the most common questions involving this tax credit.

How much money can you save?

The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000. So, if you are buying a manufactured home for $65,000, then your tax credit will be for 10% or $6,500. Therefore, the only way to redeem the full amount of the tax credit offered is to buy a manufactured home valued at over $80,000. This will mean that in most cases, the only two ways to redeem the full amount of the tax credit will be to purchase chattel and land, or to buy a brand new manufactured home right from the factory. This is because many used mobile homes are not valued over $80,000.

Do mobile home purchases qualify for the tax credit?

Absolutely, any home that will be used as a principal residence will qualify for this credit, including single-family detached homes, townhouses and condominiums, manufactured and mobile homes, and houseboats.

Mobile Homes eligible for this credit are those purchased on or after Jan. 1, 2009, and before Dec. 1, 2009, by a buyer who has not owned a principal residence during the three-year period prior to the present purchase. So, if you have not owned a home in the past three years (or more), and your purchase is complete before December of 2009, then you are eligible for the tax credit on your manufactured home purchase.

Does the tax credit have any limitations?

There’s always going to be limitations to any legislation, and the first time home buyer tax credit is not exempt. The biggest limitation relates to your income. Manufactured and mobile home buyers are limited gross incomes of $75,000 for single taxpayers and $150,000 for married taxpayers filing joint returns. If you exceed these income levels you may still be eligible for a partial tax credit up to income limits of $95,000 (single) and $190,000 (married).

When can you redeem the tax credit?

Wouldn’t it be nice if Uncle Sam would just give you the tax credit right when it was needed most? It is only in a special circumstance that this can happen, most mobile home buyers will have to wait until their tax return is filed. The special circumstance is for HUD-approved nonprofit agencies, who can advance the tax credit to (1) be used in addition to the 3.5 percent required down payment (2) to pay closing costs and/or (3) to increase the amount of down payment. I all other cases, the old saying applies – “A dollar saved is a dollar earned.”

What is the goal of this tax credit?

It is the aim of this program to help families purchase their first homes and help communities like ours that are struggling to deal with an oversupply of available housing. Another large motivation of this tax credit for the president and congress is to try to create a small jolt in the housing and banking industries in a somewhat organic way (rather than handing TARP funds directly to struggling corporations).

Will I get a check if the housing credit is higher than my tax return?

This tax credit does not have to be repaid and is refundable to the taxpayer, unlike the tax credit announced in 2008.If you owe $1,000 on your federal income tax return, and your tax credit amounts the full $8,000, then you can expect a check for $7,000 from Uncle Sam. The manufactured or mobile home buyer credit can be claimed even if the taxpayer has little or no tax liability, and the federal government will send the taxpayer a check for some or all of the refundable tax credit.

For the Official News Release from the IRS, Click Here.

June 23, 2009 · Tagged with , , , ,

Finance and Refinance, General Info, Laws & News, Production

Foreclosure Rescue Scams You Need to Know About

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Business Pundit posted a very informative blog today about 5 Nasty Foreclosure Resecue Scams to avoid.

“ According to RealtyTrac, a whopping one in 54 homes received a foreclosure notice last year. That’s 3.1 million foreclosure filings.

Scared yet? An ever-increasing pool of foreclosure rescue scammers are drooling at the prospect of capitalizing off your panic. And so far, they’re doing pretty well. From forgery to title transfer, these scamsters–some of them former real estate professionals–are making an art form of the foreclosure scam.

So far, a few pervasive scams have popped up enough times in the media to be dubbed endemic. Here they are, in no particular order. Do yourself a favor and avoid these five nasty foreclosure rescue scams:

1. The Pay Me First Scam

Some foreclosure rescue scammers ask customers to pay them fees in exchange for delaying a foreclosure. It’s actually illegal for foreclosure rescue companies to collect fees before performing a service. They should be paid after negotiating new loans or monthly payments.

Unfortunately, some homeowners find out the hard way that paying companies before they perform a service leaves them without money or a home. The Star-Telegram reports on one San Francisco-area mortgage broker advertised foreclosure avoidance workshops on Craigslist. For a $2,500 upfront fee plus a $2,000 monthly payment, Freedom Financial Solutions claimed it would halt foreclosures by finding legal violations in homeowners’ mortgage agreements.

Instead, Cheryl Ann Montero, owner of the company, took an ownership stake in her clients’ houses, then filed for bankruptcy, which suspended foreclosures. Montero, who ended up delivering nothing to her clients, made off with $52,000 before declaring bankruptcy herself.

2. The Title Transfer Scam

This scam involves transferring the title of your home to the foreclosure rescue company. This is a very, very bad idea. If your name is not on the title, guess who owns your home? Hint: It’s not you.

Rip-off Report reader Cheri had a scam like this happen to her. Facing foreclosure, she contacted a mortgage rescue company. The scammers executed a buyback scheme that would allow her to re-purchase her house at a different appraisal value. In order to finish the deal, they said they needed to put someone else’s name on the title of the home. Cheri would be a trustee, “guaranteeing” her that she would maintain control of the property while staying inside a renter.

It turned out Cheri’s name never made it to the title. She was paying down a mortgage on a home she no longer owned. The scammers made off with the title, possibly some equity, and the willingness to evict her from the house.

3. Sending Mortgage Payments to a Fake Address

Some scammers ask to receive your payment in place of the lender. They claim they have a special relationship with the lender, or can renegotiate your mortgage if you send them payments. This is sketchy, to say the least. One California scammer, for example, made $1.2 million by pretending to be a lender—then fled to his native Mexico.

If someone tells you to ignore your lender letters, or to send the payments somewhere else, run the other direction.

4. Fake Lender Letters

Some fraudsters have taken to forging major lenders’ letterhead and convincing homeowners to sign up for “official” loan modification services. Mail, envelopes, and letterhead may look exactly like the lender’s, but the content will be fraudulent.

The Lake County News reports that one Los Angeles ring even filed a fictitious business permit. The swindlers forged lender and government envelopes with “Final Notice” written on the outside. The letters inside told homeowners that if they sent in their mortgage information, they could apply for a home rescue program.

Once homeowners applied, they received a confirmation note and a set of forged lender documents. In the meantime, they were instructed to send their mortgage payments to a “Payment Processing Dept” located at a scammer’s PO box, where the money was stolen.

5. The Obama Rescue Plan Scam

The Philadelphia Inquirer reports that some rescue companies are charging as much as $3,000 to modify customer loans under the new Obama relief plan. The truth is that you can find out about rescue plan yourself, either online at MakingHomeAffordable.gov, through the Homeownership Preservation Foundation at 995hope.org, or by calling 1-888-995-HOPE.”

April 13, 2009 · Tagged with , , , , , , , , , , , , ,

Finance and Refinance, Laws & News, Production

American Recovery and Reinvestment Act of 2009

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Here’s an interesting article published by MHI (the Manufactured Housing Institute) on how the new American Recovery and Reinvestment Act of 2009 will affect Manufactured Housing:

“On February 17, 2009 President Obama signed the American Recovery and Reinvestment Act of 2009 into law. Key provisions advocated by the Manufactured Housing Institute (MHI) and its affiliates the National Modular Housing Council (NMHC) and National Communities Council (NCC) were included in the final economic stimulus package. In particular, the law authorizes a tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009.”

“Does this tax credit apply to manufactured and modular homes? Any home that will be used as a principal residence will qualify for the credit including manufactured homes, modular homes, site-built homes, even houseboats!
This also includes homes placed on private land or in a land-lease  Community, a condominium, or a cooperative.Mobile Homes financed using a personal property loan are eligible.”

Read more of the original article via MHI at:

http://www.manufacturedhousing.org/admin/template/brochures/721temp.pdf

March 3, 2009 · Tagged with , , , , , , , , , , , , , , , ,