HAR

Property sales in July slow as expected, as the brisk and early buying spree triggered by the homebuyer tax credit comes to an end HOUSTON – (August 17, 2010) – An anticipated property sales slowdown set into the Houston real estate market in July following the expiration of the federal homebuyer tax credit. The credit had propelled local home sales for four straight months beginning in March, however home sales suffered a double-digit decline in July. Despite the drop, the average price of a single-family home still managed to climb to a two-year high. According to the latest monthly data compiled by the Houston Association of REALTORS® (HAR), July sales of single-family homes throughout the Houston market fell 25.1 percent compared to July 2009. Sales volume faltered in all single-family home pricing segments except among properties under $80,000, which were flat. Sales of all property types combined slid 24.4 percent in July on a year-over-year basis. The average price of a single-family home rose 2.7 percent from July 2009 to $224,764, the highest price since June 2008. The July single-family home median price—the figure at which half of the homes sold for more and half sold for less—dipped 0.7 percent from one year earlier to $160,880, but still recorded its highest level since July 2009. Foreclosure property sales reported in the Multiple Listing Service (MLS) tumbled 13.5 percent in July compared to one year earlier. The median price of July foreclosure sales declined 6.1 percent to $84,000 on a year-over-year basis. Sales of all property types in Houston for July totaled 5,056, down 24.4 percent compared to July 2009. Total dollar volume for properties sold during the month was $1.0 billion versus $1.4 billion one year earlier, representing a 23.9 percent drop. “Homebuying came earlier and at a heftier pace than we would normally have seen in Houston during the spring and summer months because of the tax credit, but indicators showed that sales would decline once the credit expired, so this comes as no surprise,” said Margie Dorrance, HAR chair and principal at Keller Williams Realty Metropolitan. “It is encouraging that pricing has remained strong and that on a year-to-date basis home sales are actually slightly ahead of 2009 levels.” July Monthly Market Comparison The month of July brought Houston’s overall housing market largely negative results when all listing categories are compared to July of 2009. Total property sales and total dollar volume fell on a year-over-year basis while the average single-family home sales price rose to a two-year high and the median price dipped. The number of available properties, or active listings, at the end of July rose 18.6 percent from July 2009 to 55,247. That represents 1,313 more active listings than one month earlier, in June 2010, and reflects additional housing inventory that is remaining on the market as a result of reduced consumer interest following the expiration of the homebuyer tax credit. Month-end pending sales for July totaled 3,267, down 16.4 percent from last year, suggesting that sales will be down again in August. The months inventory of single-family homes for June extended to 7.7 months compared to 6.5 months one year earlier, but remains healthier than the national months inventory of single-family homes of 8.9 months, reported by the National Association of REALTORSâ (NAR). CATEGORIES JULY 2009 JULY 2010 PERCENT CHANGE Total property sales 6,686 5,056 -24.4% Total dollar volume $1,417,533,971 $1,078,840,190 -23.9% Total active listings 46,598 55,247 18.6% Total pending sales 3,909 3,267 -16.4% Single-family home sales 5,735 4,297 -25.1% Single-family average sales price $218,943 $224,764 2.7% Single-family median sales price $162,000 $160,880 -0.7% Months inventory* 6.5 7.7 19.0% * Months inventory estimates the number of months it will take to deplete current active inventory based on the prior 12 months sales activity. This figure is representative of the single-family homes market. Single-Family Homes Update July sales of single-family homes in Houston totaled 4,297, down 25.1 percent from July 2009. This concludes four consecutive months of accelerated sales activity. Broken out by segment, July sales of homes priced from $80,000 and below were flat; homes priced between $80,000 and $150,000 fell 29.2 percent; those in the $150,000 to $250,000 dropped 35.0 percent; homes priced between $250,000 and $500,000 declined 19.8 percent; sales of luxury homes—those priced from $500,000 to the millions—tumbled 22.7 percent. On a year-to-date basis, however, single-family home sales are up 2.7 percent over 2009 levels. The average price of single-family homes in July was $224,764, up 2.7 percent compared to one year earlier. That is the highest pricing level since June 2008. At $160,880, the median sales price for single-family homes slid 0.7 percent versus July 2009. That is the highest price since July 2009. The national single-family median price reported by NAR is $184,200, illustrating the continued higher value and lower cost of living that consumers enjoy in the Houston market. HAR also breaks out the sales performance of existing single-family homes throughout the Houston market.

In July 2010, existing home sales totaled 3,626, a 24.6 percent decline from July 2009. The average sales price edged up 1.4 percent to $207,644 compared to last year while the median sales price of $150,000 declined 3.2 percent from its July 2009 level. Townhouse/Condominium Update The number of townhouses and condominiums that sold in July fell 31.5 percent compared to one year earlier. In the greater Houston area, 370 units were sold last month versus 540 properties in July 2009. The average price dropped 8.6 percent to $153,907 from July 2009 to July 2010. The median price of a townhouse/condominium retreated 10.5 percent year-over-year to $119,000. Lease Property Update Demand for single-family home rentals rose 15.0 percent in July compared to one year earlier. Year-over-year townhouse/condominium rentals jumped 35.6 percent. Houston Real Estate Milestones in July At $224,764, the average price of a single-family home reached the highest level since June 2008; At $160,880, the median price of a single-family home reached the highest level since July 2009; 7.7 months inventory of single-family homes compares favorably to the national average of 8.9 months. The computerized Multiple Listing Service of the Houston Association of Realtors® includes residential properties and new homes listed by 25,000 Realtors® throughout Harris, Fort Bend and Montgomery counties, as well as parts of Brazoria, Galveston, Waller and Wharton counties. Residential home sales statistics as well as listing information for more than 50,000 properties may be found on the Internet at http://www.har.com. The information published and disseminated to the HAR Multiple Listing Services is communicated verbatim, without change by Multiple Listing Services, as filed by MLS participants. The MLS does not verify the information provided and disclaims any responsibility for its accuracy. All data is preliminary and subject to change. Monthly sales figures reported since November 1998 includes a statistical estimation to account for late entries. Twelve-month totals may vary from actual end-of-year figures. (Single-family detached homes were broken out separately in monthly figures beginning February 1988.) Founded in 1918, the Houston Association of Realtors® (HAR) is a 25,000-member organization of real estate professionals engaged in every aspect of the industry, including residential and commercial sales and leasing, appraisal, property management and counseling. It is the largest individual membership trade association in Houston and the second largest local association/board of Realtors® in the United States.

Habitation Realty will be sponsoring  White Linen Night in the Heights o August 7th 7-10pm!!

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*Enjoy wine and refeshments from Whole Foods while you listen to DJ seduction spinning LIVE 7-10 Indoor/outdoor event

 Then just a few weeks out our new ultra cool maps will hit the streets – and this year the maps will be HUGE – The map will highlight all the entertainment locations, shuttle routes and uh, ahem … refreshment stations.

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Though a tiny portion of the U.S. market, foreign buyers are purchasing homes here, according to a new report from the National Association of Realtors.

People who live in another country invested $41 billion in residential property in the U.S., representing 4% of the $907 billion overall market in the 12 months ending March 2010, according to the report, based on a survey of Realtors.

If you add in people who are recent immigrants or temporary visa holders, the total rises to $66 billion, or 7% of the residential market, according to the report. Read the full NAR report on Realtor.org.

The survey found foreigners buying property in 39 states, but a bit more than half were in four states: Arizona, California, Florida and Texas.

The buyers came from 53 countries, but the largest number was from Canada, at 23%. Mexico sent 10% of purchasers; the United Kingdom, 9%; China (including Hong Kong), 8%; Germany combined with France, 7%; and India, 5%, according to the NAR survey.

Not all foreign buyers get what they came for: 34% of potential buyers couldn’t complete the transaction because of financing problems. In some cases, banks were reluctant to lend to people who don’t have Social Security numbers.

Of those who did buy a home, 55% paid cash. In contrast, 92% of U.S. buyers financed their home with a mortgage in 2009.

The money being spent represents a tiny portion of the overall market, but nonetheless helps to put a dent in the nation’s excess supply of housing, according to economist Thomas Lawler. MarketWatch has an audio report you can hear about the survey.

And don’t miss Lew Sichelman’s Realty Q&A to find out why some condo owners are finding it impossible to sell to buyers who need FHA loans, thanks to some new government rules.

– Andrea Coombes, Personal Finance editor

Foreign buyers invade America’s home front

Give me your tired, your poor … and a real estate deal. Foreign buyers are ramping up home purchases in the U.S. What states are benefiting? Is this good for America’s battered real estate market? How long will this trend last? Housing guru Thomas Lawler sizes up the landscape on this special weekend edition of MarketWatch News Break.
Listen to radio report on foreign buyers invade America’s home front.

Selling a condo? Better hope it’s on the ‘approved’ list

Question: I own an apartment in a condominium development that I am trying to sell. I have a potential buyer who wants to use an FHA loan because of its low down-payment requirements, but he says my project is not on FHA’s “approved” list.
See Realty Q&A.

Mortgage rates hit new record lows

The 30-year fixed-rate mortgage has hit a record low, ticking down to an average 4.57% in week ended July 8, compared with 4.58% in the prior week, Freddie Mac reported.
See Mortgages.

The top three resume keywords for mortgage pros

The demand for mortgage-loan officers and document specialists is on the rise as banks staff up to restructure troubled mortgages and work with refinancing applicants.
See story on mortgage pros.

IMF praises Asia’s efforts in heading off housing bubble

Concerns of overheated real estate markets in Asia are diminishing, though regional authorities need to be on guard against destabilizing developments, the International Monetary Fund said Wednesday.
See story on IMF praises Asia’s efforts in heading off housing bubble.

Wells Fargo to cut 3,800 jobs, shut subprime lending unit

Wells Fargo Co. said late Wednesday it will cut 3,800 jobs and the banking giant will close a business unit that specialized in subprime and other loans issued through its consumer finance stores.
See story on Wells Fargo to cut 3,800 jobs, shut subprime lending unit.

Habitation Realty Real estate for sale in Houston, TX

No extensions thus far! Most sources say this is it for the Tax Credits. To qualify for this program, buyers need to be under contact by April 30th 2010 and be able to close prior to June 30th.

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Habitation Realty is expanding our team!  We are hiring new and experienced real estate agents in our Houston Heights office.  Come in to to see if you have what it takes to join the fastest growing real estate company in Houston.

Call 713-392-4047 to set up an interview and tour our facilities.

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Seasonal Summer Home Shopping, First-Time Home Buyers Buoy Houston Real Estate Market in August

HOUSTON — (September 15, 2009) — The Houston real estate market showed continued signs in August of attempting to break free from the downward trend in property sales that first began in September 2007.

Boosted by seasonal summer home buying, including an influx of first-time home buyers taking advantage of the federal government’s soon-to-expire $8,000 tax credit, the August volume of single-family home sales across the greater Houston area slid 10.1 percent compared to August 2008, according to new monthly data compiled by the Houston Association of REALTORS® (HAR). That follows July’s 6.1 percent (corrected) drop, which was the smallest decline since the market downturn began in September 2007. Total property sales tumbled 11.0 percent in August on a year-over-year basis following last month’s 5.1 percent drop, which was the smallest rate of decline since November 2007 when it was off by 10.2 percent.

At $160,880, the August single-family home median price—the figure at which half of the homes sold for more and half sold for less—rose 0.6 percent from one year earlier to the third highest level of 2009. That’s the fourth straight monthly increase in the median price. The average price of a single-family home in Houston dipped 4.2 percent last month to $213,396 compared to August 2008. That represents the third highest average price of the year.

Foreclosure property sales slowed again in August, making up 16.7 percent of all single-family home sales in the Houston area compared to 18.3 percent in August 2008 and the 12-month peak of 34.0 percent in January of this year. The median price of August foreclosure sales reported in the Multiple Listing Service (MLS) declined 7.5 percent from $93,000 to $86,000 on a year-over-year basis.

Sales of all property types in Houston for August totaled 5,904, off 11.0 percent compared to August 2008. Total dollar volume for properties sold during the month was $1.0 billion versus $1.2 billion one year earlier, representing a decline of 13.9 percent.

“We knew going in that recovery would be a gradual process, however overall indications continue to show the Houston real estate market on strong footing, particularly when it comes to price appreciation,” said Vicki Fullerton, HAR chair and broker of record at RE/MAX of The Woodlands & Spring. “Our REALTOR® members report that many first-time homebuyers have been taking advantage of the $8,000 tax credit, but time is running out with that incentive set to expire on November 30.”

August Monthly Market Comparison
The month of August brought Houston’s overall housing mostly negative results when all listing categories are compared to August of 2008. Total property sales, total dollar volume and average single-family home sales prices were down on a year-over-year basis while median single-family home sales prices rose slightly.

The number of available properties, or active listings, at the end of August fell 12.9 percent from August 2008 to 46,023. That is 575 less active listings than one month earlier, in July 2009, and considered an indicator of balanced housing inventory levels.

Month-end pending sales—those listings expected to close within the next 30 days—totaled 3,901, which was 9.3 percent lower than last year. While that most likely means sales will be down again in September, the effects of Hurricane Ike on the local real estate business one year ago make it difficult to forecast. The month’s inventory of single-family homes for August came in at 6.5 months, down from 6.7 months one year earlier, and remains much healthier than the national month’s inventory of single-family homes of 9.4 months, reported by the National Association of REALTORS® (NAR).

CATEGORIES AUGUST 2008 AUGUST 2009 PERCENT CHANGE
Total property sales 6,635 5,904 -11.0%
Total dollar volume $1,253,229,302 $1,079,356,968 -13.9%
Total active listings 52,831 46,023 -12.9%
Total pending sales 4,299 3,901 -9.3%
Average single-family sales price $222,638 $213,396 -4.2%
Median single-family sales price $159,900 $160,880 0.6%
Months inventory* 6.7 6.5 -3.0%

* Months inventory estimates the number of months it will take to deplete current active inventory based on the prior 12 months sales activity. This figure is representative of the single-family homes market.

Single-Family Homes Update

At $160,880, the median sales price for single-family homes reached the third highest level of 2009, up 0.6 percent from August 2008, when it was $159,900. August also marked the fourth consecutive monthly increase in the median price. The national single-family median price reported by NAR is $178,300, illustrating the continued higher value and lower cost of living that the Houston market offers consumers. The average price of single-family homes in August was $213,396, slipping 4.2 percent from one year earlier.

August sales of single-family homes in Houston totaled 5,058, down 10.1 percent from August 2008, and accounted for the 24th consecutive monthly drop. However, on a month-over-month basis, that volume is the third highest of 2009, and the 10.1 percent decline is the second smallest fluctuation of the year following July’s 6.1 percent (corrected) slide.

HAR also reports existing home statistics for the single-family home segment of the real estate market. In August 2009, existing single-family home sales totaled 4,328, an 8.3 percent decrease from August 2008. At $155,000, the median sales price for existing homes in the Houston area rose 4.0 percent compared to last year. The average sales price of $202,477 for the month dipped 1.6 percent from its August 2008 level.

Townhouse/Condo Update

The number of townhouses and condominiums sold in August fell compared to one year earlier. In the greater Houston area, 452 units were sold last month versus 555 properties in August 2008, translating to an 18.6 percent decrease in year-over-year sales. However, that still represents the third highest month-over-month sales volume of 2009.

The median price of a townhouse/condominium fell 10.3 percent year-over-year to $122,000. The average price dropped 9.7 percent to $153,184 from August 2008 to August 2009.

Lease Property Update

Demand for single-family home rentals rose slightly in August, up 1.2 percent compared to a year earlier. Year-over-year townhouse/condominium rentals climbed 5.9 percent.

Houston Real Estate Milestones in August

The median price of a single-family home rose for the fourth straight month to the third highest level of 2009 ($160,880);

The average price of a single-family home reached its third highest level of the year ($213,396);

Month-over-month volume of single-family home sales reached the third highest level of 2009;

Month-over-month volume of townhouse/condominium sales reached the third highest level of 2009;

Month’s inventory of single-family homes dipped from 6.7 to 6.5 months compared to the national average of 9.4 months.

The computerized Multiple Listing Service of the Houston Association of Realtors® includes residential properties and new homes listed by 23,000 Realtors throughout Harris, Fort Bend and Montgomery counties, as well as parts of Brazoria, Galveston, Waller and Wharton counties. Residential home sales statistics as well as listing information for more than 53,000 properties may be found on the Internet at http://www.har.com.

The information published and disseminated to the HAR Multiple Listing Services is communicated verbatim, without change by Multiple Listing Services, as filed by MLS participants.

The MLS does not verify the information provided and disclaims any responsibility for its accuracy. All data is preliminary and subject to change. Monthly sales figures reported since November 1998 includes a statistical estimation to account for late entries. Twelve-month totals may vary from actual end-of-year figures. (Single-family detached homes were broken out separately in monthly figures beginning February 1988.)

Founded in 1918, the Houston Association of Realtors® (HAR) is a 23,000-member organization of real estate professionals engaged in every aspect of the industry, including residential and commercial sales and leasing, appraisal, property management and counseling. It is the largest individual membership trade association in Houston, as well as the second largest local association/board of Realtors® in the United States.

Source HAR.com

The American Recovery and Reinvestment Act of 2009 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.

The following questions and answers provide basic information about the tax credit. If you have more specific questions, we strongly encourage you to consult a qualified tax advisor or legal professional about your unique situation.

1. Who is eligible to claim the tax credit?
   First-time home buyers purchasing any kind of home—new or resale—are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after January 1, 2009 and before December 1, 2009. For the purposes of the tax credit, the purchase date is the date when closing occurs and the title to the property transfers to the home owner.
2. What is the definition of a first-time home buyer?
   The law defines “first-time home buyer” as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse.For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit. However, unmarried joint purchasers may allocate the credit amount to any buyer who qualifies as a first-time buyer, such as may occur if a parent jointly purchases a home with a son or daughter. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer.

3. How is the amount of the tax credit determined?
   The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
4. Are there any income limits for claiming the tax credit?
   Yes. The income limit for single taxpayers is $75,000; the limit is $150,000 for married taxpayers filing a joint return. The tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) of more than $75,000 for single taxpayers and $150,000 for married taxpayers filing a joint return. The phaseout range for the tax credit program is equal to $20,000. That is, the tax credit amount is reduced to zero for taxpayers with MAGI of more than $95,000 (single) or $170,000 (married) and is reduced proportionally for taxpayers with MAGIs between these amounts.
5. What is “modified adjusted gross income”?
   Modified adjusted gross income or MAGI is defined by the IRS. To find it, a taxpayer must first determine “adjusted gross income” or AGI. AGI is total income for a year minus certain deductions (known as “adjustments” or “above-the-line deductions”), but before itemized deductions from Schedule A or personal exemptions are subtracted. On Forms 1040 and 1040A, AGI is the last number on page 1 and first number on page 2 of the form. For Form 1040-EZ, AGI appears on line 4 (as of 2007). Note that AGI includes all forms of income including wages, salaries, interest income, dividends and capital gains.To determine modified adjusted gross income (MAGI), add to AGI certain amounts of foreign-earned income. See IRS Form 5405 for more details.

6. If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit?
   Possibly. It depends on your income. Partial credits of less than $8,000 are available for some taxpayers whose MAGI exceeds the phaseout limits.
7. Can you give me an example of how the partial tax credit is determined?
   Just as an example, assume that a married couple has a modified adjusted gross income of $160,000. The applicable phaseout to qualify for the tax credit is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by the phaseout range of $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time home buyer tax credit that is available to this couple, multiply $8,000 by 0.5. The result is $4,000.Here’s another example: assume that an individual home buyer has a modified adjusted gross income of $88,000. The buyer’s income exceeds $75,000 by $13,000. Dividing $13,000 by the phaseout range of $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $8,000 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,800.

   Please remember that these examples are intended to provide a general idea of how the tax credit might be applied in different circumstances. You should always consult your tax advisor for information relating to your specific circumstances.

8. How is this home buyer tax credit different from the tax credit that Congress enacted in July of 2008?
   The most significant difference is that this tax credit does not have to be repaid. Because it had to be repaid, the previous “credit” was essentially an interest-free loan. This tax incentive is a true tax credit. However, home buyers must use the residence as a principal residence for at least three years or face recapture of the tax credit amount. Certain exceptions apply.
9. How do I claim the tax credit? Do I need to complete a form or application?
   Participating in the tax credit program is easy. You claim the tax credit on your federal income tax return. Specifically, home buyers should complete IRS Form 5405 to determine their tax credit amount, and then claim this amount on Line 69 of their 1040 income tax return. No other applications or forms are required, and no pre-approval is necessary. However, you will want to be sure that you qualify for the credit under the income limits and first-time home buyer tests. Note that you cannot claim the credit on Form 5405 for an intended purchase for some future date; it must be a completed purchase.
10. What types of homes will qualify for the tax credit?
    Any home that will be used as a principal residence will qualify for the credit. This includes single-family detached homes, attached homes like townhouses and condominiums, manufactured homes (also known as mobile homes) and houseboats. The definition of principal residence is identical to the one used to determine whether you may qualify for the $250,000 / $500,000 capital gain tax exclusion for principal residences.
11. I read that the tax credit is “refundable.” What does that mean?
    The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit.For example, if a qualified home buyer expected, notwithstanding the tax credit, federal income tax liability of $5,000 and had tax withholding of $4,000 for the year, then without the tax credit the taxpayer would owe the IRS $1,000 on April 15th. Suppose now that the taxpayer qualified for the $8,000 home buyer tax credit. As a result, the taxpayer would receive a check for $7,000 ($8,000 minus the $1,000 owed).

12. I purchased a home in early 2009 and have already filed to receive the $7,500 tax credit on my 2008 tax returns. How can I claim the new $8,000 tax credit instead?
    Home buyers in this situation may file an amended 2008 tax return with a 1040X form. You should consult with a tax advisor to ensure you file this return properly.
13. Instead of buying a new home from a home builder, I hired a contractor to construct a home on a lot that I already own. Do I still qualify for the tax credit?
    Yes. For the purposes of the home buyer tax credit, a principal residence that is constructed by the home owner is treated by the tax code as having been “purchased” on the date the owner first occupies the house. In this situation, the date of first occupancy must be on or after January 1, 2009 and before December 1, 2009.In contrast, for newly-constructed homes bought from a home builder, eligibility for the tax credit is determined by the settlement date.

14. Can I claim the tax credit if I finance the purchase of my home under a mortgage revenue bond (MRB) program?
    Yes. The tax credit can be combined with the MRB home buyer program. Note that first-time home buyers who purchased a home in 2008 may not claim the tax credit if they are participating in an MRB program.
15. I live in the District of Columbia. Can I claim both the Washington, D.C. first-time home buyer credit and this new credit?
    No. You can claim only one.
16. I am not a U.S. citizen. Can I claim the tax credit?
    Maybe. Anyone who is not a nonresident alien (as defined by the IRS), who has not owned a principal residence in the previous three years and who meets the income limits test may claim the tax credit for a qualified home purchase. The IRS provides a definition of “nonresident alien” in IRS Publication 519.
17. Is a tax credit the same as a tax deduction?
    No. A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $8,000 in income taxes and who receives an $8,000 tax credit would owe nothing to the IRS.A tax deduction is subtracted from the amount of income that is taxed. Using the same example, assume the taxpayer is in the 15 percent tax bracket and owes $8,000 in income taxes. If the taxpayer receives an $8,000 deduction, the taxpayer’s tax liability would be reduced by $1,200 (15 percent of $8,000), or lowered from $8,000 to $6,800.

18. I bought a home in 2008. Do I qualify for this credit?
    No, but if you purchased your first home between April 9, 2008 and January 1, 2009, you may qualify for a different tax credit. Please consult with your tax advisor for more information.
19. Is there any way for a home buyer to access the money allocable to the credit sooner than waiting to file their 2009 tax return?
    Yes. Prospective home buyers who believe they qualify for the tax credit are permitted to reduce their income tax withholding. Reducing tax withholding (up to the amount of the credit) will enable the buyer to accumulate cash by raising his/her take home pay. This money can then be applied to the downpayment.Buyers should adjust their withholding amount on their W-4 via their employer or through their quarterly estimated tax payment. IRS Publication 919 contains rules and guidelines for income tax withholding. Prospective home buyers should note that if income tax withholding is reduced and the tax credit qualified purchase does not occur, then the individual would be liable for repayment to the IRS of income tax and possible interest charges and penalties.

    Further, rule changes made as part of the economic stimulus legislation allow home buyers to claim the tax credit and participate in a program financed by tax-exempt bonds. Some state housing finance agencies, such as the Missouri Housing Development Commission, have introduced programs that provide short-term credit acceleration loans that may be used to fund a downpayment. Prospective home buyers should inquire with their state housing finance agency to determine the availability of such a program in their community.

    The National Council of State Housing Agencies (NCSHA) has compiled a list of such programs, which can be found here.

    Finally, HUD has announced that it will allow FHA-approved lenders to issue short-term loans to advance the credit amount for use in purchasing the home. Read NAHB’s press release on the announcement. Additional information will be posted when it becomes available.

20. If I’m qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return?
    Yes. The law allows taxpayers to choose (“elect”) to treat qualified home purchases in 2009 as if the purchase occurred on December 31, 2008. This means that the 2008 income limit (MAGI) applies and the election accelerates when the credit can be claimed (tax filing for 2008 returns instead of for 2009 returns). A benefit of this election is that a home buyer in 2009 will know their 2008 MAGI with certainty, thereby helping the buyer know whether the income limit will reduce their credit amount.Taxpayers buying a home who wish to claim it on their 2008 tax return, but who have already submitted their 2008 return to the IRS, may file an amended 2008 return claiming the tax credit. You should consult with a tax professional to determine how to arrange this.

21. For a home purchase in 2009, can I choose whether to treat the purchase as occurring in 2008 or 2009, depending on in which year my credit amount is the largest?
    Yes. If the applicable income phaseout would reduce your home buyer tax credit amount in 2009 and a larger credit would be available using the 2008 MAGI amounts, then you can choose the year that yields the largest credit amount.

Source-NAHB National Association of Home Builders