Cynthia Alfred's Blog

If you are one of the lucky ones that qualifies for one of the tax credits, congrats!  But don’t get so caught up in the excitement and hustle and bustle of moving to forget to actually CLAIM the tax credit.  It doesn’t automatically come to you, you have to ASK for it on your tax return.

 http://www.irs.gov/pub/irs-pdf/p4819.pdf… –  This is a summary document from the IRS that is surprisingly easy to understand, yet still chock-full of information about who qualifies for the various tax credits.

 http://www.irs.gov/pub/irs-pdf/i5405.pdf… –  This is the form you will need to attach to your return to claim the credit.  (Email me at  Nunlkme at aol.com and I will send you a copy of these forms if you prefer.)

Please note that the IRS still refers to the tax credits as the “First-Time Homebuyer Credit” even though within the document they give you the option to check the box stating that you are a “long-time resident” and not a first-time home buyer.

In addition to the form 5405, you will have to attach a copy of the settlement statement on the purchase from the title company.  This is referred to as the “HUD” or “HUD-1.”

By the way, you claim the credit on line 67 of your line 1040.  Again, they refer to the “First-Time homebuyer credit,” but that’s the right spot, even if you aren’t a first-time home buyer.

Please consult a tax professional for specifics related to your situation.

Brentwood Press, Brian’s Real Estate Update, February 26, 2010

Related articles by Zemanta

• Revised Documentation Rules To Claim Homebuyer Credit  winecommonsewer.com)
• For that home tax credit, hurry  seattletimes.nwsource.com)
• IRS clarifies tax-credit rules  seattletimes.nwsource.com)

…what happens?  When can I purchase a home again?  How long will it affect my credit?  Is it worse than a foreclosure?  Can the bank come after me for the difference between the sales price and my current loan?

It’s a fact that short sales are on the minds of many people and the Federal Housing Administration (FHA) has taken notice.

On December 6, 2009, FHA rewrote their borrower eligibility guidelines for short-sellers looking to once again own a home.  These changes went into effect immediately, and for any past homeowner that has gone through a short sale, these changes are huge!

If you stayed current on every bill you had–including your mortgage for the last twelve months–while going through the short sale process, you can purchase another home the day after your short sale closes.  According to FHA’s Mortgagee Letter 09-52, as long as you did not pursue a short sale agreement simply to “take advantage of declining market conditions, and purchase at a reduced price a similar or superior property within a reasonable commuting distance” then you are eligible for an FHA insured loan.  However, if you were late on your mortgage, late on any revolving debt, or in the process of foreclosure while going through your short sale, then all bets are off.  Potential buyers in cases such as this have to wait a mandated thirty-six months (three years) before purchasing a home through FHA.

So while many of the original questions in this column remain a mystery solved only on a “lender-to-lender” case-by-case basis, we now have a nationally recognized policy for how shortly after a short sale you can purchase a home.

Brentwood Press, Trevor’s Weekly Mortgage Matters, Trevor Frey,  February 19, 2010