First time home buyers in Ann Arbor
Yesterday, I told my team of 6 buyers agents to ask any of there new first time home buyers, “Do you have at least 3.5% to put down on your home?” It is no longer enough to ask a first time home buyer if they are “pre-approved”. First time home-buyers are going to need 3.5% down to purchase their first homes.
Two programs that are being done away with in October, the Ameridream and Nehimah program. Both of these programs allowed the seller of a home to contribute 3% to a buyer to be able to purchase their home. With the housing industry in a mess, we were seeing many first time home buyers use one of these programs to get in their homes.
This morning, President Bush signed the Housing and Economic Relief Act, a step to help over 400,000 homeowners be able to re-finance their high interest rate or ARM loans with government backed Fannie Mae and Fannie Mac loans. There is also 18 M assigned to help families in pre-foreclosure get the counceling they need to not lose their home. As with any bill, there are good points and bad points and that is not my intent to debate the bill here.
One aspect that is good for first time home buyers who purchased after April 2008 and until April 2009, is a $7500.00 tax credit that will be taken off your tax liability when you purchase your first home. In order to qualify for this you would need to make under $75,000 for a single filer and under $150,000 if filing jointly.
Another alternative for a 1st time home buyers in Ann Arbor and Washtenaw County is that you are allowed to withdraw, $10,000 from your IRA to purchase your first home. There is no penality on the withdrawl, however, you would be taxed at your normal tax liability rate. **not for 2nd home buyers or investment buyers**
Always check with your accountant or professional financial advisor before withdrawing money from your IRA. This is just a possible solution if you are a first time home buyer and want to take advantage of the $7500.00 income tax credit between now and April 2009.
Lets hope the new bill is able to help families strapped to stay in their homes and not loose them.
You can start your home search here for Ann Arbor houses throughout Washtenaw County.
August 4th, 2008 at 4:33 pm
3.5%??? Come on Missy! I know it’s not your fault, but “when I was a first time home buyer” just 10 years ago, we had accumulated 15% down and were personally disappointed that we couldn’t find 20% which WAS the standard.
Again, not your fault, but this is why we have the housing “crisis” today – because people are “buying” homes they can’t afford. They have no equity, they’re renting, not buying. One blip in the economy – interest rate, job change – and these “homeowners” who really should still be renters are toast. If they still rented, they’d be fine, break the lease and move on.
Also, these folks buying homes artificially raises the price for people like me, which puts some of my peers into situations where they buy and only have 3.5-5% down.
I’m not even 40, but my first home purchase seems like a generation ago the way things have been going. No wonder people are so messed up…
August 4th, 2008 at 4:54 pm
Hi Caleb, we bought many years ago, FHA with 3% down. I don’t disagree with your concerns but in today’s market most buyers have NOT saved for a down payment but some had good incomes.
Regardless, it will not be an FHA Requirement to have 3.5% down with no seller concessions. I’m sure you read the bill Congress passed and the President signed so hopefully with at least SOME of their own money they will be less likely to walk away. Hope all is well !