Your Stimulus!

The California $10,000 Tax Credit for the purchase of a new home has made a lot of news lately.

The increase in conforming loan rates by Fannie Mae, Freddie Mac, FHA and VA have also brought home buyers back into the sales offices.

Now, we see the impact of falling interest rates. Chief Economist, Frank Nothaft from Freddie Mac announced that the 30 year fixed rate mortgage averaged 5.03% during this past week. This is good news!

That means for a home priced at $400,000, with good credit and a 3.5% down payment (loan amount = $386,000), your loan payment would be less than $2,100 per month (P&I only). This is for an FHA loan. For a VA loan (no down payment) you payment would be around $2,150 per month (P&I only).

If you buy a new home in California, you would be eligible for a $10,000 State Tax Credit. If your family income is less than $150,000 and you have not owned a home in the last 3 years, you may also be eligible for an $8,000 Federal Tax Credit. If you want to buy a home where your loan amount would be over $417,500, but less than $697,500 (in San Diego County), your rate would go up to 5.25%.

But, timing is important! According to the Franchise Tax Board, $6,987,515 of State Tax Credit has been applied for by 711 new home buyers, through March 11, 2009

With home prices back at 2002 levels (or lower), historically low mortgage interest rates, higher conforming loan amounts and up to $18,000 in tax credits, can you think of a better time to buy a new home? Many people are taking advantage of these “Buyer Friendly” market factors. And, many builders are reporting increased sales so far this year. Is this the right time for you? Stop by a Brookfield Homes sales office and let our professional sales counselors walk you through the decision making process. They will help you find the home of your dreams!

$10000 CA Tax Credit

The American Recovery and Reinvestment Act brought us an $8,000 Federal Tax Credit and higher loan limits.

The $10,000 California State Tax Credit came from SB 15 and was part of the State Budget compromise.

Put these programs together and you may be eligible to receive up to $18,000 in State and Federal Tax credits along with a higher conforming loan amount. Buyers are beginning to understand the potential of these stimulus packages.

In the first three (3) days of the $10,000 California State Tax Credit, the Franchise Tax Board received over 170 requests for certification of the tax credit. The amount requested was over $1.7 million! That’s a lot of buyers, paying a lot of attention to the new stimulus legislation!

President Barak Obama signed into law yesterday H.R. 1, The American Recovery and Reinvestment Act of 2009. As part of the new law, first time home buyers will be provided up to an $8,000 tax credit. The credit will be available to those home purchasers that close escrow on a home between January 1, 2009 and December 1, 2009.

This is a true credit, refundable to those taxpayers that have less than $8,000 in tax liability. That means the IRS will give you $8,000 to help pay your taxes in 2009, for buying a home in 2009. If you owe the IRS $9,000 for your 2009 taxes, you will only have to send them $1,000. If you owe the IRS $2,000 for your 2009 taxes, the IRS will send you $6,000, if you buy a home in 2009. What a great deal! There are some restrictions that home buyers should be aware of:

1. The credit can not be used as part of your down payment and you still have to qualify for a loan.

2. There are income limitations for the purchasers, $75,000 for an individual or $150,000 for a couple. Partial credits may be available if you exceed the maximum income limits.

3. The Tax credit is for 10% of the home’s value, up to $8,000. And, it may be used to buy a new, resale or foreclosed home.

4. You must be a first time home buyer. By definition, this means you (and your spouse, if buying jointly) must not have been a home owner for the past 3 years.

There are other provisions in the American Recovery and Investment Act of 2009 that home buyers might want to be aware of:

1. The new law extends the higher Fannie Mae and Freddie Mac conforming loan rates from 2008 thru December 31, 2009, check with your lender for specifics of loan limits in your area.

2. Extends tax credits for energy efficiency home improvements.

3. Provides a “patch” for the Alternative Minimum Tax rules for 2009.

More information will become available over the next couple of weeks. Watch this blog for future updates. Until then, good luck and good shopping for that new home!

Does anyone in Washington DC realize their failure to act is deepening and prolonging the worst “recession” since the Great Depression of the 1930’s? I have never heard so much talk about what elected representatives are going to do and witnessed so little action by those same elected officials. IT IS TIME TO DO SOMETHING!

Pres. Obama

Last night, the President talked about his thoughts on what Congress should do. The President said the United States of America was facing a “profound economic emergency”. He stressed now was the time for action and acknowledged that “…the plan is not perfect. No plan is.” He also talked about the opportunity for more bipartisan negotiations, which would be available through the conference committee action on the Senate and House bills.

Sen. Collins

This morning, the Senate confirmed the bill was headed to a vote today. $838,000,000,000 (eight hundred and thirty-eight billion dollars) is spread over job creating and tax saving ideas for the American public. Investments in infrastructure, aid to the unemployed, tax cuts, energy self reliance and other programs are proposed to get people back to work. Estimates as high as 4,000,000 (four million) more unemployed people have been put forward, if Congress does not stop talking and take action soon to reverse the negative economic spiral.

Sect. Geithner

Treasury Secretary Timothy Geithner talked this morning about his new ideas for stimulus money. The Secretary’s proposal for the second half of the TARP bailout money rehashed grandiose ideas for the creation of another Washington acronym … TALF. The “Term Asset-backed Securities Loan Facility” would use $100,000,000,000 (one hundred billion dollars) of the remaining $350,000,000,000 (three hundred and fifty billion dollars) in the TARP to leverage up private equity investments in the “toxic assets” still under ownership by major banks. The Secretary talked about how the fund could ultimately be worth $1,000,000,000,000 (one trillion dollars) or more. The Secretary also talked about $50,000,000,000 (fifty billion dollars) be set aside for “…programs to help roughly 2.5 million people avoid foreclosure in the next few years …”. Lots of talk, very little detail was offered in this mornings briefing.

TARP was approved in October of 2008. It did stop a very real potential for financial disaster. The downward spiral of our banks was slowed. And, the government had a short time to collect its thoughts and prepare to deal with the real issues of the economic slowdown. It is now February 2009. The last five months have been about talk, talk, talk, talk and talk. The result is 2,000,000 (two million) more people are out of work. Confidence in the government is failing … fast. People are losing their homes. Bankers are spending $1,000,000 (one million dollars) redecorating their offices. CEO’s are flying their private jets to DC to beg for bailouts. No loans are being made. The GDP fell dramatically. And, we are staring a Depression square in the face.

Talk. Talk. Talk. Talk. Talk. And, still no action.

Are you ready to do something about it? Contact your representative. Tell them the talking is done! It is time for action! NOW!!!!

Seawater desalination will be a big part of our future water supply, as much as 10% or more. Recycled and grey water will account for 12% of our needs and local water sources will add another 7%. While Agricultural transfers and canal projects will account for 31% of our supply. (www.sdcwa.org)

What’s an agricultural transfer? Or canal project? In the Imperial County, water is delivered to farm fields through a series of earth lined canals and ditches. The water seeps through the bottoms and sides of these distribution facilities and is lost into ground water. SDCWA has an agreement with the Imperial Irrigation District (IID) to line these canals with concrete, and modernize the on-farm and in-system conservation programs, thereby saving thousands of acre feet of water per year. In return for improving the canals and conservation systems, the IID is transferring the water that would have been lost to the SDCWA. This could account for over 278,000 acre feet per year, when all the canals are lined!

Unlined Canal

The part where you can help is in the conservation programs. SDCWA is currently running a “20-Gallon Challenge”, with a goal of achieving an additional 56,000 acre feet of water conservation this year. The 20-Gallon Challenge is not difficult and it could save you money. The SDCWA has prepared a web site that outlines some of the easy ways to reduce your water consumption on a daily basis and outlines some of the easy ways to get reimbursed for making improvements to your water system. Just go to: www.20gallon Challenge.com for more information.

Brookfield is doing their part in saving water through such things as installing low flow shower heads and fixtures in all our new homes. We use low water, drought tolerant landscaping and moisture sensitive irrigation equipment that controls the amount of water and and timing of irrigation to minimize output and maximize results. We live in a semi-arid land. We must respect our natural resources and use them wisely. We encourage everyone to step up to the 20-Gallon Challenge!