program began October 1. While it was debated for several months before being approved, it’s been a bit overshadowed by the $700 billion bailout bill. The program, which will offer 30-year fixed mortgages, will end on September 30, 2011. It’s expected that it will be a few weeks before consumers can take advantage of the program because banks just recently received the details. There is also some speculation on how many lenders will actually use of the program. To be eligible for the program, borrowers must meet the following qualifications as listed on the FHA website: Borrowers are encouraged to contact their lender to determine eligibility, but may be eligible if, among other factors:

• The home is their primary residence, and they have no ownership interest in any other residential property, such as second homes.
• Their existing mortgage was originated on or before January 1, 2008, and they have made at least six payments.
• They are not able to pay their existing mortgage without help.
• As of March 2008, their total monthly mortgage payments due were more than 31 percent of their gross monthly income.
• They certify they have not been convicted of fraud in the past 10 years, intentionally defaulted on debts, and did not knowingly or willingly provide material false information to obtain their existing mortgage(s).

HOPE for Homeowners also includes the following provisions:

• The loan amount may not exceed a maximum of $550,440.
• The new mortgage will be no more than 90 percent of the new appraised value including any financed Upfront Mortgage Insurance Premium.
• The Upfront Mortgage Insurance Premium is 3 percent and the Annual Mortgage Insurance Premium is 1.5 percent.
• The holders of existing mortgage liens must waive all prepayment penalties and late payment fees.
• The existing first mortgage must accept the proceeds of the HOPE for Homeowners loan as full settlement of all outstanding indebtedness.
• Existing subordinate lenders must release their outstanding mortgage liens.
• Standard FHA policy regarding closing costs applies, and they may be:
  • Financed into the new loan provided the value of the mortgage (including the Upfront Mortgage Insurance Premium) does not exceed 90 percent of the new appraised value of the home.
  • Paid from the borrowers’ own assets.
  • Paid by the servicing lender or third party (e.g., federal, state, or local program).
  • Paid by the originating lender through premium pricing.
  • The borrower must agree to share with FHA both the equity created at the beginning of this new mortgage and any future appreciation in the value of the home.
  • The borrower cannot take out a second mortgage for the first five years of the loan, except under certain circumstances for emergency repairs.

For more information, you can go to http://www.hud.gov/hopeforhomeowners/ — the updated website for the HOPE for Homeowners program.

 with nine already agreeing to participate in the program, as it seeks to reverse a collapse in trust among institutions that is blocking lending. Treasury Secretary Henry Paulson urged financial institutions to start offering cash again to prevent further company failures.

While the cost of three-month dollar loans has dropped in the wake of the measures, it’s still 305 basis points more than the Fed’s target rate. The difference was a record 332 basis points on Oct. 10. It was 82 basis points on Sept. 15, the day Lehman Brothers Holdings Inc. filed for bankruptcy, and 11 basis points on July 31, 2007, just before the start of the credit squeeze.

Retail Sales Slide Signals Deepening Recession  -The eroding U.S. economy drove retail sales into their longest slump in at least 16 years, even before this month’s market collapse signaled a deepening recession.

Consumer purchases fell 1.2 percent in September, extending the decline to three straight months, the first time that’s happened since comparable records began in 1992, Commerce Department figures showed today. In another sign of weakening demand, prices paid to U.S. producers fell last month on lower fuel costs.

Sales are slowing just as merchants prepare for the holiday selling season, on which they depend for the largest share of their revenue. San Francisco Federal Reserve President Janet Yellen said yesterday the U.S. may already be in a recession, and stocks dropped amid concern that the government’s plans to inject capital into banks won’t halt the economy’s decline.

 GMAC LLC, the financing arm of General Motors Corp., has “limited if any access to funding” for its mortgage and auto-lending units, Chief Executive Officer Al de Molina said in an e-mail to employees.

GMAC may trim auto lending in some international markets, de Molina said in the e-mail yesterday. The Detroit-based company is considering “strategic initiatives” for insurance businesses, he said.

“We’ve pursued a `self-help’ approach that on some days is akin to hand-to-hand combat,” de Molina said in the e-mail. He said the lender’s Residential Capital LLC unit is “perhaps the most challenged operation.” GMAC doesn’t comment on employee communications, spokeswoman Gina Proia said.

GMAC is restricting auto lending to buyers with credit scores of at least 700, who represent about 58 percent of U.S. consumers. The move this week added to the global credit squeeze that threatens to choke economic growth as companies and consumers find it harder and more expensive to borrow. Plummeting auto sales and record foreclosures have resulted in $5.4 billion in losses at GMAC over the past year and led credit agencies to reduce the debt to junk.

The state of the economy is at the forefront of the nation’s mind and most, if not all, of us are following the multitude of news reports and press conferences that are occurring. Here’s the latest as of Tuesday morning.

President Bush announced early Tuesday morning the government’s $250 billion plan to purchase shares in nine of the nation’s major banks. The initial nine banks, with a few needing a bit of persuasion, have “agreed to accept government stakes for the good of the economy”. Additional banks wanting to apply for government purchases must do so by the November 14 deadline. Eventually the banks will buy back the stock.

Source: msnbc.com

“These efforts are designed to directly benefit the American people by stabilizing the financial system and helping the economy recover,” President Bush said in his statement.

Treasury Secretary Henry Paulson, Federal Reserve Chairman Ben Bernanke and FDIC head Sheila Blair also spoke Tuesday morning. They announced the implementation of the three steps below:

“First, Treasury is announcing a voluntary capital purchase program. A broad array of financial institutions is eligible to participate in this program by selling preferred shares to the U.S. government on attractive terms that protect the taxpayer. ”

“Second, after receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Paulson signed the systemic risk exception to the FDIC Act, enabling the FDIC to temporarily guarantee the senior debt of all FDIC-insured institutions and their holding companies, as well as deposits in non-interest bearing deposit transaction accounts. Regulators will implement an enhanced supervisory framework to assure appropriate use of this new guarantee. ”

“Third, to further increase access to funding for businesses in all sectors of our economy, the Federal Reserve has announced further details of its Commercial Paper Funding Facility (CPFF) program, which provides a broad backstop for the commercial paper market. Beginning October 27, the CPFF will fund purchases of commercial paper of 3 month maturity from high-quality issuers. ”

The full statement can be found at http://www.treas.gov/press/releases/hp1206.htm. Paulson said Tuesday, “Today’s actions are not what we ever wanted to do - but today’s actions are what we must do to restore confidence to our financial system.”

RET-Think Real Estate in Newport Beach, Ca

 Q: I decided that this was a good time to buy, and found this really great house at a great price. It’s an older home, and very charming, but there is about $10,000 worth of various electrical and termite repairs that the inspectors have found that need to be done. I know that’s not that much compared to the $300,000 I’m paying for the place, but I’m going to be pretty house-poor after escrow closes. I’m afraid I’m going to lose my dream house over these issues. What should I do? Searching for your next home at www.OCpropertyLink.com

A: As always, the lawyer in me has to say, “It depends.” Did the original contract have an as-is clause? If so, it may be unethical to demand that the seller pitch in to fix these defects, though he might offer to if the other alternative is for you to back out of the deal. Are the repairs required by your lender or your city/state to be completed by the seller? Is the seller an individual or a bank? A bank is highly unlikely to contribute to these sorts of repairs, unless required to do so by law. How badly do you want the place? All of these things impact how you should proceed.

Mindset Management

If you love the house, feel that you’re getting a good value, and the proposed financing will work for you on a long-term basis, look at ways to resolve or work around the problems, rather than instantly fearing that you’re going to lose the house around this. In life, generally, what we fear we often create. If you approach this problem from the perspective of losing the place, you will. If you approach it committed to working this out, you almost certainly will.

If you are attracted to the charm of older homes, understand that this level of repair (or more) is liable to be required on any older home you consider buying (and in many of the newer ones, which have often been less well-cared-for). In fact, I know home inspectors who feel that older homes are often a better bet, conditionwise: The quality of materials and craftsmanship when they were built was often superior to those of newer homes, and any major functional or structural issues will have usually emerged by now, so the chances of a major surprise occurring are much smaller.

Home inspection reports can be worded very strongly, in the interest of protecting the inspector from liability. Don’t let the verbiage freak you out — there are lots of answers and clarifications you need to get before you can determine whether the repairs needed are potential deal-breakers.

Need-to-Knows

In the world of home improvement and repairs, things are not always black and white. For example, opinions will vary on what specific repairs are necessary — some electricians prefer to actually ground two-pronged outlets, while others prefer to install ground-fault circuit-interrupting outlets. I know that’s gibberish, but these are basically two solutions to the same issue of ungrounded outlets — the first solution costs thousands, while the other costs $50 per outlet.

Also, every item that the home inspector points out may not, strictly speaking, need to be done (or may not need to be done with any urgency). Inspectors’ professional standards require them to call your attention to recommended upgrades and other items that, when you ask them, they would either never complete if they were buying the house themselves or they would complete over a number of years, rather than trying to get them all done up front. Pest reports, for instance, are actually inspections for all sorts of wood-destroying organisms and conditions, not just pests. So, if your pest report comes back indicating actual termite infestation, that is an item you need to ensure gets handled urgently. However, if it comes back indicating a fence with dry rot, that may be a much less urgent repair — and may even be duplicative of a fence rebuild that you were wanting to do irrespective of the pest report.

As a homeowner-to-be, it’s time for you to learn the art and science of obtaining multiple repair bids. If you have one bid for $10,000 and you go out and get two more, you’re very likely to end up with three totally different amounts and even three totally different recommended courses of action. Whether you buy this particular house or not, take this lesson with you throughout your career as a homeowner: Always get multiple bids for repairs or home improvements. You may not always want to take the lowest bid, because professionalism and quality of work vary along with pricing, but that’s another story. Until you have multiple bids, you don’t truly know how much the repairs will cost.

Finally, your Realtor will help you obtain a home warranty policy before close of escrow; in many markets, the seller will even pay for this item. While home warranty plans don’t cover everything that could ever go wrong with your home, they do dramatically limit your potential exposure for when things break. Ask your Realtor to help you review your home warranty policy coverage and exclusions right now. Generally speaking, if any of the items you’re concerned about are, for example, systems or mechanisms that are currently working but may need repair or replacement soon, those items may be covered by your home warranty — but only after escrow closes and only when they actually stop functioning.

Action Plan

If you are committed to trying to resolve these repair issues so that you can move forward with the purchase of your dream home, here’s the plan of action I suggest:

1. Get multiple bids and opinions on the necessity, cost and urgency of the recommended repairs. Get contractor referrals from your Realtor and friends, and also ask them if they would recommend an alternative course of action.

2. Ask the seller for a closing-cost credit or repair-credit holdback. Most lenders won’t let you get cash from a seller credit without the repairs being done before closing, so you have two options. You can either (a) ask the seller to pay for some of your closing costs, so you can reserve your closing-cost funds and use them to have repairs done after closing, or (b) you can ask the seller to give you a repair credit, and leave that money in escrow after closing until your licensed contractor submits an invoice to escrow. I prefer either of these to having the seller complete the repairs, as I think few sellers will have the work done the way that you, the new homeowner, would. Consult with your Realtor and mortgage broker about which of these options your lender will allow, and stay flexible — if the seller agrees to pay for only half of the repairs, then you can evaluate whether that’s enough to allow you to move forward.

3. Ask seller for repairs. If you can’t get credits for whatever reason, like the seller already giving you the maximum credits your lender will allow, ask the seller to complete the repairs. Ask for an invoice from a licensed contractor, and ask if you can select any cosmetic or finish materials.

4. Ask seller for price reduction. If the seller can’t do the repairs or offer you a credit, ask them to reduce the price for some or all of the costs you’ll be incurring for repairs. A price reduction is not ideal, as it doesn’t result in you having the cash to get the work done, and will often not reduce your down payment or monthly payment amounts enough to allow for the repairs, but it’s certainly better than nothing!

Tara-Nicholle Nelson is author of “The Savvy Woman’s Homebuying Handbook,” and “Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions.” Ask her a real estate question online.

***

 Q: I manage a mid-sized apartment complex, and have recently been asked by a prospect who uses a wheelchair for a parking space next to the unit she is considering. We can do that, though we have a waiting list for parking, but it will involve reassigning other tenants’ parking spaces, buying signs and painting the pavement, and creating curb cuts. Who pays for all this work? –Sean D.

A: Requests from tenants and prospects with disabilities fall into one of two categories. A request for a structural change to the property is a modification request, while a request that you change, make an exception to, or adjust a rule, policy, practice or service is an accommodation request. Generally, tenants pay for modifications (except in Massachusetts and in federally financed buildings) and, if it’s feasible, can be asked to pay for undoing interior modifications. Landlords must shoulder the costs of accommodations.

Sometimes, providing a parking space will not involve physical changes, but instead will require changing a policy, such as your practice of giving parking spaces on a first-come, first-served basis. Tenants who are disabled are entitled to “jump the queue” and receive a parking place, even when there’s a seniority-based waiting list. (The rule is a bit different in an employment context, where an employee with a disability has the right to be transferred to a vacant position as an accommodation, but doesn’t have the right to jump the seniority-based line for that position.) The request you describe is a bit of a hybrid, because you not only must vary your policy, you also have to physically modify the space. Courts have treated hybrid parking requests like this as accommodations, and place the responsibility for paying for their preparation and upkeep on the owner. Remember, you can’t charge the disabled person extra for the parking, either.

Q: Several weeks ago, my college-age nephew signed a one-year lease with several students in an apartment complex. He paid the first month’s rent and a portion of the security deposit. A few days later he learned that a dorm room is available and wants to get out of his lease. His roommates and the landlord are upset and are demanding that he continue to pay rent until he finds someone to take his place on the lease. They also want him to forfeit his share of the security deposit. The landlord offered to let him out of the lease if he pays a penalty equal to his share of the rent for two months. Isn’t there a grace period that would allow him to change his mind? –Robert G.

A: Your nephew has broken his lease even before moving in, and has potential legal problems with both the landlord and the roommates. Before you can advise him, you need to understand the law (Can the landlord impose a penalty? Is your nephew responsible for finding a substitute?) and the market (How desirable is this rental? How difficult will it be to find a suitable replacement?). After you see the whole picture, you’ll know what to do.

Unfortunately for your nephew, however, there’s no easy out here. A few consumer transactions do come with a legally required cancellation period — under the Federal Trade Commission’s “cooling off rule,” you have until midnight of the third day to cancel a door-to-door sales contract for more than $25, or a contract for more than $25 made anywhere other than the seller’s normal place of business. Many states have additional cancellation rules, covering contracts for dance or martial arts lessons, credit repair services, health club memberships, dating services, weight loss programs, timeshare properties and hearing aids — but not leases. The moment he penned his name to the lease, he obligated himself to its terms.

The landlord’s solution to this lease-breaking — imposing a penalty — is not a legally sanctioned response, and your nephew doesn’t have to go along with it. Judges routinely enforce contract provisions that make people pay for the actual damages they cause when they break a contract. A penalty, on the other hand, is designed to punish, not to fairly compensate the other side. Judges won’t enforce penalties, particularly in a contract between a business and a consumer (rather than a business-to-business transaction).

Landlords don’t have to resort to illegal penalties to make sure that they don’t lose money when a co-tenant breaks a lease. They are entitled to the entire rent from the remaining co-tenants, courtesy of the principle of “joint and several liability” (think of it as the legal version of the Three Musketeers’ “All for one and one for all”). The landlord may be concerned that without your nephew’s contribution, the remaining tenants won’t be able to come up with his share of the rent and the landlord will have to evict them. In that case, he can choose to accept a short rent check and make up the difference with funds from the deposit, but savvy landlords won’t go this route. After all, they might need to use the deposit to cover more unpaid rent or to pay for repairs when the tenants move out. Most landlords will demand the entire rent and leave it up to the remaining roommates and the departed co-tenant to work it out among themselves.

This puts your nephew’s roommates in a difficult spot, having to shoulder his portion of the rent until they find (and the landlord accepts) a substitute. They cannot just sit back and expect your nephew to produce a new roommate, however — they have to take reasonably prompt steps to replace him (and of course, your niece should help in the search). Once they find a sub, your nephew’s obligation to pay rent ends. If it takes them a month to find a new occupant and they’ve had to dip into their pockets to cover his share of the rent, they can sue him for that amount. If the rental is desirable, the price is right, and the roommates are an attractive bunch, they might find a new co-tenant right away, and your nephew’s losses would be minimal. If the opposite is true — the rental is in a college town awash in vacancies, with many opportunities for better digs at lower prices — he could be responsible for his share of the rent for the entire lease period.

Janet Portman is an attorney and managing editor at Nolo. She specializes in landlord/tenant law and is co-author of “Every Landlord’s Legal Guide” and “Every Tenant’s Legal Guide.” She can be reached at janet@inman.com.

You can’t turn on a TV today without someone selling you telecom services.

From cell phones to high speed net access, the deals are abundant. In this five-part series, we are looking at novel ways to understand trends that impact our home’s value.

In most parts of the country there are two major providers of telecom services for phone and Cable TV.

For the last year or so the battles have been fierce to get homeowners to sign up for bundled services. This “triple play” is comprised of telephone service, Cable TV and internet access. The theory is that if you sign up for all three from one provider, you will save money and build allegiance with one carrier. They are hoping for that too!

One trend that is seen in most planned communities and new developments is the deployment of Fiber To The Home (FTTH). This process runs fiber optic cables directly into your home to provide the greatest bandwidth opportunity for your telecom needs which you can find at Http://www.FREEpropertyLink.com

A study by RVA Market Research (www.rvallc.com) says there are now 2.91 million homes connected via end-to-end fiber, compared to 1.48 million connections as of April 2007.  This represents an annual growth rate of 97 percent – indicating that the number of FTTH connections continues will almost double annually.

The study also shows fiber to the home networks now passing 11.8 million North American homes, up from 8 million a year ago. The overall ‘take rate’ – the percentage of those offered FTTH service who decide to subscribe – went up for the fourth straight six-month period.

Another study gets to the trend we are covering. High technology-enabled homes sell faster and for more money.The study, conducted for the Fiber To The Home Council (FTTHCOUNCIL.com) and was covered in Consumer Reports Febuary 08 issue. Here are the major findings:

Recently there have been a lot of stories about isolated areas that have seen 20% reductions in home values.

Most agree that these areas saw the highest run-ups over the last few years. What seems to be working is the fact that housing affordability is now driving a reversal. Again, not everywhere, but the stats need to be appreciated. Interest rates are still very attractive and stable these days. In fact, the Mortgage Bankers Association reported increased mortgage applications and listed stable rates as an indicator. ( See Release)

The National Association of Realtors has now reported four straight months of rising housing prices, but it seems no one is listening.

According to NAR statistics, the median home price has fallen from a high of $230,200 in July 2006 to a low in February 2008 at $195,600, a drop of 15%. Since February, however, it has risen steadily every month. By May the index (which will be revised on July 24) had risen to $208,600, up $13,000 and a full 6.6%. Another indicator, the mean home price (otherwise known as the average home price), has also shown strength and has risen from a low of $242,000 also in February of this year to $253,100, a rise of $11,100 or 4.5%. It has also risen every month since February of this year. You can see this at Http://www.OCpropertyLink.com

‘I just don’t know where Wall Street’s brains are today,’ said David Michonski, CEO of Coldwell Banker Hunt Kennedy in New York City. ‘Everyone on the Street is wringing their hands over housing when in fact the average American has been out this spring buying homes and pushing the median price higher. This has got to go down as one of Wall Street and Main Street’s biggest disconnects in history.Rising prices on expanding volume should not a crisis make on Wall Street,’ says Michonski.

Is this the bottom?

No one can know for sure, but the hard data is clear. The median price has risen four straight months. The average American is out there taking advantage of bargains in their local real estate market. They are not listening to Wall Street but following their own belief that the best time to buy is when no one else is, and they are out there buying. If this keeps up, February may prove to have been the low in prices.

It is possible that it will not be Hank Paulson or Ben Bernanke who will pull this country out of a housing recession, but the good common sense of the average American whose affordability to buy a home is at a five year high and is acting on it.

Existing-home sales In Orange County

ncluding single-family, townhomes, condos and co-oops — increased by 2 percent in May from a level of 4.89 million units in April, according to a report from the National Association of Realtors. Total housing inventory at the end of May fell 1.4 percent. This represents a 10.8-month supply at the current sales pace, down from a 11.2-month supply in the previous month.

Lawrence Yun, NAR’s chief economist, added this note:

“The large supply of homes on the market clearly favors buyers, and it should take several months to draw the inventory down significantly. Stabilization in home prices can only occur with buyers returning to the market, so we are encouraged by rising home sales, particularly in distressed markets.” You can find several homes in Orange County at Http://www.OCPropertyLink.com

Another indication of an improving real estate market was noted by Frank Nothaft, chief economist for Freddie Mac. “The recently released S&P-Case Shiller house price indexes for April offer a few surprises,” he said. “The decline in the 20-city composite index was less than that in March, and eight cities had positive monthly growth in April, compared to only two cities in March. Also, May’s new home median sales price increased from the prior month, according to the Commerce Department.”

Action on legislation expected soon.

Calling the legislation the American Housing Rescue and Foreclosure Prevention Act of 2008, (H.R. 3221) contains a provision that would provide a temporary, first-time home buyer tax credit of $8,000 for the purchase of any home used as a principal residence and closed on between April 9, 2008 and April 1, 2009. In 1975 there was a similar situation in the housing market with a huge supply of new and unoccupied homes. The $2,000 tax credit then was a major stimulus that reduced housing inventory by about 60%. The overriding theme is to overcome the situation where one has to sell their existing home before buying another. With a larger pool of first-time buyers in the market, many could move up the housing chain.

The legislation is designed to help struggling home owners, jump-start the housing market, save jobs and restore consumer confidence. Consumers are finding home at local markets like http://www.OCPropertyLink.com

The legislation would allow the Federal Housing Administration to guarantee up to $300 billion in new loans to help at-risk homeowners refinance into more affordable mortgages. In exchange for evading the foreclosures, lenders would be forced to reduce the loan’s value to 85% of the balance.

“Helping people to avoid foreclosure and stay in their homes is a worthy goal”, Richard Dugas, Pulte Home CEO said, “but that alone will not stimulate home purchases. And without home buyers, housing prices keep sinking, leaving more and more Americans wondering how low they can go — and therefore, more antsy about purchasing cars, furniture and other products”.

Whether you are a home owner, renter or potential home buyer, the housing stimulus bill will likely affect you.

The National Association of Home Builders highlights some of the provisions:

Temporary home buyer tax credit.

For first-time home buyers, a tax credit will reduce taxable income the first year after buying a home and will help provide a bigger refund or a lower tax bill.

< set up a Google alert and track any story with Homebuyer Tax Credit in it >

With this incentive, many home buyers who have been sitting on the fence will dive into the market. Homes sitting on the market will sell, home sellers will buy new homes, demand will increase, and home prices will stabilize. Stable home prices allow existing home owners to refinance if needed or sell their home without taking a loss on their biggest investment.

FHA modernization.

The Federal Housing Administration (FHA), an agency of the federal government, helps borrowers with less-than-ideal credit ratings or limited down payment cash get affordable mortgages. As the program stands now, taxpayers could end up paying some of the costs of the program’s outdated systems and procedures.

The pending bill will increase limits on FHA-approved loans to match current home prices and allow the agency to insure more homes in high-cost markets. It also includes a new FHA foreclosure prevention program to provide new loan guarantees to help as many as 400,000 at-risk borrowers stay in their homes.

GSE reform.

Freddie Mac and Fannie Mae are government-sponsored enterprises (GSEs) that buy mortgages from lenders; giving them the cash needed to make more loans to home buyers. Changing the way they are regulated will enable them to offer more loan programs and make more funds available for home purchases or to refinance troubled loans to be available to home buyers and owners.

Mortgage revenue bond program.

Foreclosures, which are making the news headlines every day, can be lessened with the expansion of the mortgage revenue bond program. This will help low- and moderate-income families and individuals finance the purchase, rehabilitation or improvement of single-family residences, which will mean that fewer homes will go into foreclosure. It will also provide more mortgages for first-time home buyers.

Calls Growing Louder For A Homebuyers Tax Credit

 …..because prices are more realistic and waiting until Congress does anything may waste a golden opportunity for savings. This theory of “buy now vs. later” involves the savings on interest should you wait to purchase when rates go up, as well as missing out on the perfect home you may find at Http://www.OCpropertyLink.com

The National Association of REALTORS®

testified recently that a temporary tax credit would be the best incentive to move hesitant home buyers into the market. NAR based its support on the success of a 1975 temporary tax credit designed to “clear an over-supply of newly constructed homes during an economic downturn.”

“We urge Congress to move quickly to conference and final passage of this tax incentive,” said Jim Helsel, a NAR Official. Testifying for NAR, Helsel noted “three critical features for an optimal home buyer tax credit.” The credit should apply to all residential real estate, not solely foreclosed properties; it should be temporary and only apply for a short period of time; and it should provide higher income limits than those the House has imposed, particularly for single individuals. “If these measures are put in place, many individuals who are sitting on the fence will take steps to buy a home. This would not only help homeowners, buyers and sellers, but it could also expand activity as individuals furnish, paint and improve their homes. This would help boost the nation’s economy,” Helsel said.

Another organization with a vested interest is the National Association of Home Builders (NAHB). In 1975, when there was almost a three-year supply of vacant houses on hand, lawmakers approved a $6,000 credit spread over three annual installments of $2,000 per year.

This time around, the builders are angling for a $10,000 credit, maintaining that on a price-adjusted basis, that amount is equal to the 1975 credit. There will be continuing coverage of this issue in the next e-alert . Most insiders agree that any new laws will probably include sales that occurred previous to enactment. So if you are in need of new housing, even just as an investment, jump on the opportunity because if the tax credit is enacted you would probably not loose out. Please consult your sponsor for more suggestions on your individual situation.