Although scaled back from the $15,000 credit proposed in the Senate, the $787 billion economic recovery package signed into law by President Obama does contain tax incentives for first time home-buyers. The new program is a tax credit of 10% of the purchase price of the home with a maximum credit of $8,000.

USA Today reports that unlike the program that this legislation replaces, this is a true tax credit that is subtracted from the amount of tax owed to the government. To be eligible for the full credit, the person must be a first time home-buyer, and must make the purchase between January 1 and December 31, 2009. To avoid any type of repayment, the person must own the home for at least three years. Finally, the amount of the credit is scaled back if Adjusted Gross Income (AGI) exceeds $75,000 for a single person or $150,000 for a married couple.

Following the passage of the Stimulus bill, the markets have been shaky. The stock market has seen some tough days. For the moment, this has not affected the mortgage bond market and interest rates remain low. However, should the current trend continue on Wall Street, bond yields should begin to rise, which will ultimately move interest rates higher. If you have a loan in process, now would be a good time to consider locking your rate.

If you are a first time home-buyer thinking about buying a home in Dallas, now is the time to act. Take advantage of both the newly approved tax credit and the low interest rates in the market today. In Dallas, your bargaining strength as a credible buyer is exceptionally strong. There is a shortage of both higher quality properties and qualified buyers in the market today.

And by all means, please contact a Dallas REALTOR® if you are a first time home-buyer. It costs you nothing to obtain representation when you buy a home, and it can save you tremendously. The credit and housing markets are challenging in this times, don’t go it alone.

With a voice vote last Wednesday, the US Senate voted to expand the existing $7,500 first time home buyer tax credit. The existing program, which is better described as a zero interest loan went into effect last spring, and has been available to first time home buyers only. The National Association of Home Builders. The newly proposed $15,000 first time home buyer tax credit, in its current legislative state, would be applicable to any home buyer, provided that the home is to be used as the primary residence for at least 24 months. The amount of the tax credit is actually 10% of the purchase price of the home or $15,000, whichever is less.

Different than the $7,500 program that it replaces, this tax credit does not have to be repaid to the government – it is a true tax credit. The proposed legislation will replace the old program on a specific date, and will be applicable to any home purchased by a first time home buyer after the enactment date. US News and World Report. Beyond the increase in scope of participation and increase in value, this proposal also offers some additional features that may be of significant value. For example, as long as the home is purchased before your 2008 taxes are due, the credit may be applied to your 2008 tax bill. Finally, there is no apparent restriction on income of the participants – come one, come all.

New York Times notes that this is one of two amendments to the stimulus bill that the US Senate endorsed by voice vote last week. This measure is anticipated to have a cost of $18.5 billion based on the anticipated volume of home purchases. The second measure endorsed by the Senate was a measure to provide incentive to buy new automobiles.

Bloomberg press reports that a Stimulus Bill approval vote is likely to come on February 10 in the Senate. Following this measure, the bill would have to be reconciled with the version passed by the House of Representatives last week. Both the Senate vote and the reconciliation process allow an opportunity for things to change from the currently proposed form.

Stay tuned. As soon as the legislation is finalized, I will post complete information on the details of the program, and how to access the benefits.

Although it may seem counter-intuitive, I believe that now is an excellent time for first time home buyers in Dallas to enter the market. Many entry level homes are available at great prices in Dallas, especially if you are a first time home buyer that can do a few repairs. The number of foreclosure properties in Dallas is increasing, but these properties frequently come with a few warts. Given that the last occupant could not afford the mortgage, it is likely that they could not afford to keep up with repairs either. However, with a little TLC, Dallas homes can be spectacular again. They are all at a discount price for first time home buyers in Dallas.
So how do you go about buying a home in Dallas as a first time home buyer? How do you know if you are getting a good deal? How do you get it financed? How does the closing process actually work? How do I obtain good advice when being a first time home buyer? All of these are great questions, and the answer to most of them is “don’t do what I did when I was a first time home buyer in Dallas.” Here’s my story…
Young and relatively new to Dallas, I was ready to be a first time home buyer. A US Navy officer at the time, I knew that I could obtain financing through the VA and have little out of pocket cost. I walked into a local real estate office in and announced that I was ready to be a first time home buyer in Dallas. I was soon signing a long term representation agreement with an agent that turned out not to know very much. It was up to me to figure things out, and I made some rather large mistakes (bought a house about 300 yards from the Dallas county line. Had I crossed over the line, taxes and car insurance would have been significantly cheaper).
So here are my recommendations to any first time home buyers in Dallas. First, work with a seasoned agent or broker that has years rather than minutes of experience about Dallas real estate. Get to know them before signing a long term agreement, and then only sign an agreement if you have a way out. Don’t get yourself tied up for six months. Good agents will always have clauses that will release you from the agreement. Also, if you are a first time home buyer in Dallas make sure that you really trust the person you are working with. Watch the way that they present information and ask questions until you can determine whether or not they seem knowledgeable and trustworthy. If you can get a reference from a friend, do so. If the references you use are provided by the agent, ask them hard questions.
Second, if you are a first time home buyer in Dallas get yourself qualified for a mortgage before you start a serious search. This will let you know what you can afford. No sense looking at $750,000 homes if you only qualify for a $200,000 mortgage as a first time home buyer. When it comes time to make an offer, you are going to have to prove to the seller that you can obtain financing before they will accept the offer. Going through the qualification process early as a first time home buyer in Dallas will help throughout the process.
Finally, think about the things that are really important to your life, and find a home near them. Being a first time home buyer, I purchased in the outer Dallas suburbs, but my life never moved out there. All of our friends and social events were in Dallas. Being a first time home buyer, I could have afforded to pay a higher mortgage in exchange for the fuel and wear and tear that I put on my cars.