A Fresh New Look at the Homebuyer Tax Credit and How To Build Your Pipeline

1. A Fresh New Look at the Homebuyer Tax Credit and How To Build Your Pipeline FIRST-TIME HOMEBUYERSUp to $8000 First-time homebuyers (people who have not owned a home within the last 3 years) may be eligible for a tax credit – 10% of the purchase price of the home, with a maximum available credit of $8,000.00

2. Look What's New“Current Homeowners Also Qualify under the New Extension up to $6500” Tax credit of up to $6500 (up to $3250 for a married individual filing separately) for qualified purchasers who have owned and occupied a primary residence for 5 consecutive year during the 8 year period ending on the date the replacement home is purchased.

3. Signed into law November 6th 2009, extends an expands the first-time home buyer credit allowed previously. MAXIMUM PURCHASE PRICE $800,000.00 DEADLINES: In order to qualify for the credit, all contracts need to be in effect no later than April 30th 2010 and close no later than June 30th 2010. The Worker’s Homeownership and Business Assistance Act of 2009

4. Income Caps • People with higher incomes can now qualify for the credit! The new law raises the income limits for homes purchased after Nov 6th 2009. The credit phases out for individual taxpayers with modified adjusted gross income (MAGI) between $125,000 and $145,000 or between $225,000 and $245,000 for joint filers. The existing MAGI phase-out of $75,000 to $95,000 or $150,000 to $170,000 for joint filers still apply to purchases on or before Nov 6th, 2009

5. Repayment of Tax Credit • This credit does not require repayment unless the home, at any time in the first 36 months of ownership, is no longer an individual’s primary residence

6. Claiming the Tax Credit • Cannot claim the tax credit in advance of purchasing a property. For qualifying purchases in 2010, taxpayers have the option of claiming the credit in either their 2009 or 2010 returns.

7. Special Restrictions • According to the IRS, home buyers CANNOT Claim the tax credit if any of these cases exist: • They buy the home from a close relative. This includes a spouse, parent, grandparent, child or grandchild. Step-Relatives are not included. • The do not use the home as their principle residence • They sell their home before the end of the year • They are a non-resident alien • They are, or were, eligible to claim the District of Columbia first-time homebuyer credit for any taxable year. (This does not apply for home purchases in 2009 • Their home financing comes from tax-exempt mortgage revenue bonds. (Does not apply for home purchases in 2009) • They owned a principle residence at any time during the 3 years prior to the date of purchase of their new home. • Borrowers are allowed to have a non-occupying cosigner provide the borrower meets all the requirements of the tax credit.

8. How to Create a Successful Corporate Sponsored Homebuyer Seminars • Work with Corporate HR Departments to set up homebuyer programs for corporate employees in conjunction with The Worker’s Homeownership and Business Assistance Act of 2009. • Seminars should be conducted at the business centers during business hours if possible and promoted as an employee benefit by the employer. • Have the employer personally notify their employees. If the company has a newsletter, have them announce the seminar. • You want the seminar to be conducted with a pre-selected Real Estate Agent who will share in the cost to present the seminar and in return gain new clients looking to buy a home. We will show you later how to select the right agent. • School Districts, Firehouses, Police Departments and Ambulance Service Providers are also excellent resources to conduct seminars. Make sure you include the “FHA Good Neighbor Program” into these seminars. Learn more about the FHA Good Neighbor Program on our Blog in Loan Officer Marketing Tools at midtennprocessingsolution.wordpress.com.

9. Conduct HUD/RD approved first-time homebuyer seminars. – Power Point Presentations can be purchased on-line for a relatively low cost or you can create your own power point presentation. Free on-line presentations are available where you can get gather ideas or contract your MI representatives for seminar material. If you want to put together your own presentation and would like to have an outline on topics to discuss in your presentation we have provided you with a link that might be helpful. It is a little dated and some of the information contained in the presentation would not be effective in this market, but it still is an excellent source to design your own Power Point Presentation and helps you create what you want to discuss. Remember to hit all the important aspects of a first time homebuyer seminar; make sure you perform all then necessary requirements to have your seminar certified by agencies that support community home buyer programs, HUD and USDA/RD; and most of all keep it within the time frame the employer has provided. http://paymenteliminator.com/fthb/seminar/

10. Review credit reports with the employee and discuss credit improvement options. See Chapter Seven of the Loan Officer Handbook on our website for support material Pre-qualify the employee. See page 113 of the Loan Officer Handbook on our website for support material. Offer a one year home owners warranty through premium pricing. – See below for more details on how to fund the program for relatively low cost. You can find several companies to compare pricing on-line. Since you will be funding the first year premium we recommend you compare pricing and any exclusions to determine what programs is most cost efficient. Offer one year mortgage protection insurance from job losses through premium pricing. – See below for more details on how to fund the program for relatively low cost. You can learn more about this insurance by clicking on the link below. http://www.bankrate.com/brm/news/mtg/20011108a.asp

11. Selecting A Buyers Agent Who Knows How to Speak to a large audience. Agents who are member of an organization like Toast Masters are well trained speakers. Someone you like. Knows enough about the business to ensure that all the details are handled properly. Will return client calls and be available for showing when needed. A full time Agent. Has people to cover for them when they are not available Has a good referral of happy clients.

12. Items to cover in a presentation Different ways to search for and find the home of your dreams. – Real Estate Agent How to budget for home ownership. – Mortgage Broker What type of home is best for you, condominium, townhouse, or single family home – Real Estate Agent How to qualify for a Home mortgage and get pre-approved. Mortgage Broker How to choose the right type of mortgage loan. (fixed rate, arm, balloon, etc.) – Mortgage Broker How much of a monthly mortgage payment do you qualify for? ( mortgage calculator ) – Mortgage Broker How much house can you afford? – Mortgage Broker How to buy a home with NO Down Payment. – Mortgage Broker – RD and Good Neighbor Program The advantages of owning versus renting. – Real Estate Agent and Mortgage Broker How to understand your credit report – Mortgage Broker and their assistant How to improve you credit score. – Mortgage Broker to set up private appointments What the different real estate and mortgage terms mean. Real Estate Agent and Mortgage Broker. Offer a Real Estate/Mortgage Broker paid one year Home Owners Warranty and Mortgage Protection Insurance from the employees that are presented as an employee benefit by the employer. Real estate agent to pay 50% of the cost at closing and Mortgage Broker to pay 50% through premium pricing.