Utah Real Estate & Mortgage Blog

The Down Payment Assistance Program is federally funded and is to be used to help income-eligible first time home buyers purchase single family residences. Funds can only be used for closing and/or down payment costs. There are a limited number of loan/grants available each year and qualified applicants will receive their financial award on a first come, first served basis.

No monthly payment is required & no interest accrues on any down payment assistance given.  Down payment assistance is paid back when (and if) a triggering event occurs, such as the homeowner sells the home, transfers title or refinances to take out equity.  If the amount owed is partially forgiven (e.g. $2,500 in Murray instead of $5,000 after 15 years), the remaining balance does not become due at that time – it would be paid back when a triggering event occurs, such as those already mentioned.
Cities that have down payment assistance:

• Salt Lake City
• Kearns
• Magna
• Sandy
• Murray
• West Jordan
• West Valley

Availability changes daily, first come first serve basis. For specific guidelines and applications you can contact:

Amber Segura
Loan Officer
Security National Mortgage    
801-815-9564

Confused about how to start making your home more comfortable & energy efficient?
Wondering how to prioritize your home improvements?

There is a special State of Utah program that is subsidizing 80% of the cost for a Home Performance Assessment!  For $100 (this assessment is normally $400-$500) you can find out how efficient your home is and take advantage of The Utah Home Performance Program with ENERGY STAR®.  This program offers a comprehensive, whole-house approach to home improvement that results in better energy efficiency, greater comfort and lower energy bills.

The Utah Home Performance with Energy Star program will pay up to $2,000 toward those improvements if you agree to choose the most cost effective options to reduce your fuel usage by 20%.

How Efficient is Your Home?

Analysts certified by the Building Performance Institute (BPI) visit your home to perform a Home Performance Assessment and provide a customized energy- and cost-saving action plan. If you choose to make energy efficiency improvements that achieve 20% energy savings using a program partner you may qualify for cash back on a percentage of the job cost, in addition to utility rebates and tax credits!

Here are 7 ways you might improve your home with this program.

1. Improve attic insulation

2. Improve air tightness of home “air sealing”

3. Properly use programmable thermostat

4. On demand tank-less water heater

5. 95% efficient furnace

6. New Energy Star rated fridge or dishwasher

7. New Energy Star rated windows

Participation Requirements

• Your home must be built prior to 2000
• Your home must be owner-occupied
• A 20% energy savings must be achievable in your home

Benefits of Making Energy Efficient Home Improvements

• Save money. Leave a smaller energy footprint.
• If you are selling your home, a favorable performance assessment might help you sell faster and for more money.
• Increase comfort. By making your home work as a system, you can stay cooler in summer and warmer in winter, and help eliminate drafty rooms.
• Get cash back. The Utah Home Performance Program offers cash incentives to help offset the cost of energy-saving home improvements. Based on your income level you could receive back either 50% or 80% of the job cost, up to $2000, after utility incentives have been deducted. You may also be eligible to receive state and federal tax credits on qualifying improvements.

Assessment Costs

The initial assessment is offered at a subsidized cost of $100 which is an out-of-pocket expense that you will pay the Analyst at the time of the assessment. When you receive the Final Assessment you will be expected to pay the fee up front but the Program will reimburse you for the cost, up to $400. This rebate is separate from the Program rebate.

Contact us at 801-792-5040

Last month I wrote an article about interest rates.  On November 4th, 2010…my best lenders were offering 3.75% rates on a 30 year loan.  Six week later, rates are now 5% to 5.25%.  Keep in mind, that a 1% change in rates is almost equal to a 10% change in the price for a home.  Call me today if you are ready to get off the fence, and buy a home.

HOW?

Three different lenders I work with contacted me today about home loan rates.  All three of them are able to do a 30 yr fixed rate FHA or VA  loan at 3.75% (apr 3.99%).  WOW!  With the loan rates getting even better today, you can save an estimated $72 a month (see example below).

Saving $72 a month on your Utah home payment is great, but how does $72 a month = $25,000 in savings?  Look at the total interest paid over the life of the loan as given in the example below.  In addition to the lower payment, you will save thousands in total interest paid.  What a great day to buy a home.

Interest Rate: 3.750% (3.99% APR)

Loan Amount: $250,000.00 ~

Term of the Loan: 30 years

Monthly mortgage payments: $1,157.79 ~

Total interest paid over the life of the loan: $166,804.04

VS.

Interest Rate: 4.25% (4.49% APR)

Loan Amount: $250,000.00 ~ Term of the Loan: 30 years  

Monthly mortgage payments: $1,229.85

Total interest paid over the life of the loan: $192,745.91

Buy more home today than yesterday.  Contact me today to find out more about these rates and loan programs. 801-792-5040

November Update on Utah Home Lending:

• There is money available as of November 4, 2010 for Down Payment Assistance (up to $10,000) throughout Salt Lake County.
• 100% financing programs available.  NO DOWN PAYMENT!
• $100 down payment HUD homes are available throughout Utah.
• Special Loan deferral programs are available in Salt Lake County (up to $20,000!)  No payment/No Interest on select homes.
• FHA rehab loans that allow you to buy a home through FHA and receive the money to rehab/repair a home at the same time.
• FHA  Energy Efficient Mortgages that allow you to update windows, appliances, furnace, hot water heater, insulation when you purchase a home.

If you have a steady job and decent credit, you may be a home owner before the end of the year.

801-792-5040

For Utah families in these current economic times, the dream of owning a home seems to be moving farther away. With expensive closing costs, a high down payment and other fees, some families don’t have the extra cash to get into a home. That’s when the Community Development Corporation and the Own in Murray program steps in to help.

In 2009, Murray City approved $25,000 from Community Development Block Grant funds to assist people who want to purchase a home in Murray. Qualified applicants received between $5,000 and $7,500 to help cover those extra out-of-pocket costs. For the current fiscal year, $49,000 has been set aside for Murray’s down payment assistant program.

Funding for the program is limited, so applicants are being encouraged to apply as soon as possible. Applicants must submit all required documentation, meet eligibility requirements, have a good debt-to-income ratio and meet income requirements depending on the number of family members working and living in the home. A chart listing income eligibility as well as a link to the application packet can be found on the Murray City website at www.murray.utah.gov.

Most down payment assistance loans have a zero percent deferred interest rate and for residents who stay in the home for 15 years, half of the loan is forgiven.

“I think we will be able to do seven loans this year,” Harper said. “If someone is looking to purchase a home, they should contact a Realtor with Zoom Real Estate for more information.”

In addition to the Murray City program, there are programs to help buyers in Utah County, Davis and Salt Lake County.  The money will not last long.  Contact Kris today at 801-792-5040 to learn more.

Congress just passed an expanded version of the $8,000 first time home buyer tax credit that was set to expire on November 30. The new version of the tax credit has the potential to stimulate the housing market even more than the old version due to the fact that more people will qualify under the new rules.   Although the tax credit remains at $8,000 for home buyers that have not owned a primary residence in the last three years, it has been expanded to include a $6,500 tax credit for home buyers that have lived in their current primary residence for at least five consecutive years out of the past eight years. Under the old rules, move-up home buyers did not qualify.

Consider these three examples:

Example 1:

Rain purchased a home in 2002, lived there for 5 years as her primary home, moved out in 2007, and turned that home into a rental property. If Rain decides to buy a new primary residence today, she would qualify for the $6,500 tax credit based on the fact that she lived in the same  residence as her primary home for at least five consecutive years out of the past eight.

Example 2:

Joel purchased a home in 2004, and lived there for the past 5 years as his primary home. If Joel decides to buy a new primary residence today, he would qualify for the $6,500 tax credit based on the fact that he lived in the same residence as his primary home for at least five consecutive years out of the past eight.

Example 3:

Cherie purchased a home in 2006, and lived there for the past 3 years as her primary home. If Cherie decides to buy a new primary residence today, she would not qualify for the $6,500 tax credit based on the fact that she did not live in the same residence as her primary home for at least five consecutive years out of the past eight.

The tax credit applies to homes purchased for less than $800,000 before May 1, 2010. If you sign a binding contract to purchase a home before May 1st, you would need to close on the transaction before July 1, 2010.  It works kind of like a gift certificate that can be redeemed for cash.  You simply file a form with the IRS right after you buy your home, and the IRS will send you a check for the full amount of your credit.

The income limitation for single tax payers went up from $75,000 under the old rules to $125,000 under the new rules. For married tax payers, the income limitation went up from $150,000 to $225,000. For single and married tax payers, the credit phases out as you make $20,000 more than your respective limits.  This means that more people will qualify for the credit – especially in parts of the country with higher costs of living. This should help stimulate parts of the housing market that may not have been impacted by the old version of the credit.  There are many creative ways of structuring your home purchase transaction in ways that maximize the benefits of the credit. Here are a few examples:

• The credit applies to 1-4 unit homes as long as you live in one of the units as your primary residence – you could live in one unit and rent out the others

• If two unmarried individuals buy a home, and only one of the individuals qualifies for the credit based on their income or past home ownership status, the individual who qualifies for the credit can claim the full credit. (Note: In the case of married couples, both spouses must qualify for the credit.)

• The credit applies even if you have co-signers on your mortgage loan

If you have questions or a scenario you would like to introduce, please call Joel Ellowitz at 801-949-4872.

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NAR Frequently Asked Questions / Homebuyer Tax Credit Changes

National Association of REALTORS® Government Affairs Division

Here are some of the most frequently asked questions on the changes to the Homebuyer Tax Credit.

Question: Existing homeowner credit: Must the new house cost more than the old house?

Answer: No. Thus, for example, individuals who move from a high cost area to a lower cost area who meet all eligibility requirements will qualify for the $6500 credit.

Question: I am an existing homeowner. On October 25, 2009, I signed a contract to purchase a new home. I have lived in my current home for more than 5 consecutive years and am within the new income limits. I will go to settlement on November 20. If President Obama has signed the bill by the time I go to settlement, will I qualify for the new $6500 tax credit?

Answer: Yes. The existing homeowner credit goes into effect for purchases after the date of enactment (when the bill is signed). There is no reference to the date of contract for the new credit. The provision looks solely to the date of purchase, which is generally the date of settlement.

Question: I am a first time homebuyer but was not within the prior income limits at the time I entered into my contract to purchase on October 30, 2009. I will be covered, however, by the new income limits. If the new rules have been signed into law by the time I go to settlement, will I be eligible for a credit?

Answer: Yes. The new income limitations go into effect as soon as the President has signed the bill. The income limit and other eligibility rules will look to your status as of the date of purchase, which is the settlement date. So if the new rules have been signed when you go to settlement, you should be eligible for the credit (or a portion of the credit if you’re within the phaseout range).

Question: I am an eligible existing homeowner. I have a fair amount of equity in my home. I have found a home with a nonnegotiable price of $825,000. Will I be able to use any of the $6500 tax credit?

Answer: No. The $800,000 cap on the cost of the purchased home is firm at $800,000. Any amount above $800,000 makes the home ineligible for any portion of the credit. The $800,000 is an absolute ceiling.

Question: I owned my home for 10 years, but sold it two years ago year and have been renting since. If I purchase a home, will I be eligible for the $6500 tax credit if I meet all the other eligibility tests?

Answer: Yes. Because you lived in the home for more than 5 consecutive years of the previous 8, you will qualify for the $6500 credit. For example, Say John and his wife bought a home in 2000 and lived there until 2008 when he got a divorce. Whether John has been renting or bought in the interim, he WOULD INDEED be eligible for the credit because he owned a home and occupied it as his principal residence for 5 consecutive years out of the last 8 years. The keyword here is “consecutive.” As long as he lived in that house for 5 years straight what he did since 3 years doesn’t impact eligibility.

Question: I am an eligible first time homebuyer. I entered into a contract to purchase on November 1, 2009. Do I have to go to closing before December 1? How does the extension date affect me?

Answer: You do not have to close before December 1. Once the legislation has been signed, it will be as if the Nov 30 date had never existed. Therefore, so long as the contract settles before April 30 (or July 1, worst case), the purchaser will be eligible for the credit.

If you have questions or a scenario you would like to introduce, please call Joel Ellowitz at 801-949-4872.

Hello Zoom Members,

I have been scouring the proposals in the Legislature, trying to get guidance on what will transpire with the Tax Credit.  The Tax Credit must be the most influential measure in our housing crisis that has helped lift the market to at least water level, if not slightly peeking into the sky.  All Real Estate Professionals have been concerned about the eventual stimulus spigot abruptly being turned off.  It could have sent our housing market back under water and our home values with it.

This morning news of a plan emerged.  Surprisingly, there’s not a lot of print and direction from the Press.  Allow me to give you the facts and some suppositions that Legislators are mulling around.  Senators agreed to extend the tax credit for first time home buyers and to offer a reduced credit to some repeat buyers. $8K for 1st time buyers and up to $6500 to repeat buyers that have owned their home at least 5 years. Those are the facts.  The Legislature is considering, for 1st time buyers, to extend the $8K tax credit through March, 2010.  After March, the $8K will go down $2000 for each month until the end of June, when it will be over.

This is great news.  Our housing market in Utah was one of the last markets to feel the pinch on value depreciation, and it will likely be one of the last to recover fully.  Don’t get me wrong…we have bottomed out, in my opinion, we just need more time to emerge into a vibrant market which is able to support our Builders in erecting new homes, and eat up existing inventories to levels that promote growth.

If you are reading my Mortgage Market Update in our monthly newsletter, you are well informed about the fact that the Feds are now scaling back their purchase of Mortgage Backed Securities (MBS).  You have read that the impact of this will be a smoother transition to higher mortgage rates.  My recommendation to our Members is not to sit on the sidelines.  If you are considering a purchase in the next 1-5 years, I suggest you begin your purchase NOW.  We could very well be at 6% on a 30 year fixed mortgage by March and, I believe, we will go up from there.  Your interest rate is the single most influential factor on your monthly cash flow.

Please contact me if you want to hear strategies that I have been implementing for my clients.  These strategies are intended to minimize your interest rate and improve your cash flow for long term success in home ownership.  There are many factors that go in to my ultimate recommendation.

Success to you my friends,

Joel Ellowitz

(801) 949-4872

The Home Run Grant is Baaaaack!

The Home Run 2 Grant is a mortgage assistance program that grants $4,000 to home buyers who wish to: (A) have a new home constructed, (B) have a partially-constructed home completed, or (C) purchase a newly-constructed home. It must be the primary residence of the home buyer. Homes that have been previously occupied do not qualify.

How is Home Run 2 different from the first Home Run program?
The first Home Run program, which ended in June 2009, provided a $6,000 grant to eligible home buyers. Home Run 2 provides a $4,000 grant. The first program required that homes be ready for occupancy upon closing. Home Run 2 buyers have two additional options. They can purchase a home that is contracted for construction or partially finished and contracted for completion. Homes that have been previously occupied do not qualify.

When a Home Run 2 Grant Commitment is issued, if the Eligible Home is fully constructed, the Commitment expires 10 calendar days after the date of issuance (unless that day falls on a weekend or holiday and then it is the following business day). If the Eligible Home is somewhere in the construction process, the Commitment expires on June 30, 2010.

All other aspects of the program are materially the same as the first Home Run program, as summarized below.

Who is eligible to receive a $4,000 Home Run 2 Grant?

• Home buyers who did not receive a $6,000 grant under the previous $6,000 Home Run Grant Program.
• Home buyers (any person taking title) must meet the following income restrictions:
  • Single person, maximum income, $75,000
  • Married couple, maximum income, $150,000
  • If more than one unmarried person is taking title to the Eligible Home, each such single person is subject to the $75,000 income limit.
• Income calculations will be determined by the Adjusted Gross Income as verified by the Approved Lender using the 2008 IRS Federal Income Tax transcript obtained directly from IRS or from an authorized third-party vendor.
• Home buyers must occupy the purchased home as a primary, permanent residence.If home buyers need a mortgage loan to purchase the home, the loan must be a fixed interest rate, amortizing mortgage loan with a term of 30 years or less.
• The Home Run 2 Grant Program is effective only for home purchases closed after a Home Run 2 Grant Commitment has been issued for that specific transaction. The grant funds may not be issued for homes purchased prior to obtaining the Home Run 2 Grant Commitment.

Can Cash Buyers qualify to get the Home Run 2 Grant?
Yes. Cash Buyers must contact Utah Housing directly. Cash Buyers, like all other Buyers, must obtain a written Home Run 2 Grant Commitment prior to closing.

What property types can be purchased with a $4,000 Home Run 2 Grant?
Eligible property types include single-family detached homes, condominiums, planned unit developments (PUD), twin homes, town homes and manufactured homes permanently affixed to a foundation.

What type of loan can a home buyer use to purchase the home?
If a home buyer needs a mortgage loan, it must be a fixed interest rate loan with a term of 30 years or less. Loans may be obtained from any Approved Lender. Examples of qualifying loans include:

• Conventional loans
• FHA, VA, or Rural Housing loans
• Utah Housing Corporation loans

How does a home buyer apply for a $4,000 Home Run 2 Grant?
Apply for a grant through an Approved Lender like City 1st Mortgage (801-266-2466). Approved Lenders are the key link between a home buyer and the Home Run 2 Grant.

Do I have to be a first-time home buyer to get a Home Run 2 Grant?
No. Home Run 2 Grants are available to all home buyers (all persons who take title) whose maximum income is $75,000 for singles, $150,000 for couples and, if more than one single person takes title, the $75,000 limit applies to each such single person.

Can the $4,000 Home Run 2 Grant be combined with the new $8,000 federal tax credit?
Yes, if home buyers meet the independent criteria of both the federal government and the Home Run 2 Grant programs, they may take advantage of both. The $4,000 Home Run 2 Grant is available to both those who are first-time home buyers as well as those who previously owned a home. The $8,000 federal tax credit is available only to first-time home buyers.

How many Home Run 2 Grants are available to home buyers?
A total of approximately 1,950 grants of $4,000 each will be available. Only one grant can be used for the purchase of each home and can only be issued to persons who did not obtain a grant under the previous $6,000 Home Run Program. Home Run 2 Grants are distributed on a first-come, first-served basis to fully-qualified home buyers.

Is the Home Run 2 Grant taxable?
The Home Run 2 Grant will probably be taxable as income under federal and state tax laws. Utah Housing does not provide any tax advice regarding the taxability of the Home Run 2 Grant. If Utah Housing receives a favorable ruling from the Internal Revenue Service that a Home Run Grant is not taxable, Utah Housing will post the ruling on its Website (www.utahhousingcorp.org) and a home buyer should review the ruling in connection with the preparation of their tax return(s).

If I have additional questions, who do I contact?
Contact City 1st Mortgage at 801-266-2466.

Important Note: Buyers should make sure that they work closely with an Approved Lender for the Home Run 2 Grant Program to ensure that required materials are submitted in a timely manner, but not prematurely.

When a Home Run 2 Grant Commitment is issued, if the Eligible Home is fully constructed, the Commitment expires 10 calendar days after the date of issuance (unless that day falls on a weekend or holiday and then it is the following business day). If the Eligible Home is somewhere in the construction process, the Commitment expires on June 30, 2010.

Steps to obtain a Home Run 2 Grant.

1. Buyer signs a contract to: (A) have a new home constructed, (B) have a partially-constructed home completed, or (C) purchase a newly-constructed home. It must be the primary residence of the home buyer. Homes that have been previously occupied do not qualify.
2. Buyer applies for mortgage loan through an Approved Lender and Approved Lender obtains all required Home Run 2 documentation and written loan underwriting approval.
3. When all required Application materials have been obtained, Approved Lender submits a Home Run 2 Grant Request to Utah Housing and receives from Utah Housing a Home Run 2 Grant Commitment authorizing the Grant for the Buyer.
4. The purchase closing is scheduled at a title company. As soon as closing documents have been signed, the title company faxes required documents to Utah Housing so that it can request that the Escrow Agent send a wire of $4,000 to the closing.
5. The Home Run 2 Grant Commitment must be dated on or prior to the date shown on closing documents.

Call us today at 801-266-2466 to get started!

*Information provided by utahhousingcorp.org

As most of you may already know, there are many home buying grants available to Buyers in Utah. It’s important that your Realtor & Mortgage Lender is educated in the many available grants out there. The Real Estate Professionals at Zoom Real Estate are educated and have successfully closed many transactions using grant money. Grant money sometimes can be used towards your down payment and doesn’t ever have to be paid back!

There are Federal, State, County & City grants available to those who qualify.

Federal Tax Credit:
$8,000 First Time Home Buyers (Good until November 30st, 2009)

Utah State Grants:
ADDI Grant – $2,000 Grant

County Grants:
Utah County: $5,000
Tooele County: $2,000
Davis County: $2,000

City Grants:
Sandy: $10,000
Kearns: $10,000
Magna: $10,000
Taylorsville: $5,000
West Valley City: $5,000
West Jordan: $5,000
Ogden: $5,000

Most cities only allocate so much money towards these programs and frequently run out of funds. You can also qualify for more than one grant – so you can tack them all together! West Jordan just announced they just received additional funds and will begin taking applications on the 27th of July! Sandy has also received additional funding and now has up to $10,000 available to those who qualify.  Grants come and go so don’t delay if you are considering buying.

Call a Zoom Real Estate Professional today at 801-999-8005 to learn more.