$8000 tax credit - more details

Now that all the details are out on the new home buyer tax credit, here are some more features not in my first post earlier:

-It's NOT JUST FOR 1ST TIME BUYERS. You an also take it if you have not owned a home just in the previous 3 years.
-It is indeed capped at 10% of the purchase price if the purchase price is below $80,000.
-If you make over the income limits, a partial benefit is available if you make between $75,000 and $95,000 (individual) or $150,000 and $170,000 (couple).
-This is only for owner-occupied primary residence homes. You can only have one primary residence at a time.
-If you use a bond money mortgage, you still qualify!
-You can't buy the home from a close relative.
-You can take the credit in either 2008 or 2009.

Here's a great summary sheet:
http://www2.cabr.org/files/HomebuyerTaxCredit.pdf

Obama's foreclosure-prevention plan

This morning, President Obama unveils his plan pledging $275 billion to help stop foreclosures. To my understanding, it subsidizes lenders to restructure mortgages that are in trouble to the point at which the payments are brought down to 31% of the borrower's income. Banks that have taken TARP government bailout money will be forced to do this program, and that's a lot of the banks.

Critics of this plan keep pointing out that of all the mortgages that have been restructured so far, 50% of them are in redefault. They say this as a way to show that it doesn't work. But they're completely missing the point. That means that half of the time, IT DID WORK! They're making their payments. It saved an American family from going through the pain of foreclosure, it saved the lender a bunch of money by not having to foreclose, and if this plan continues to work just half of the time, it will prevent literally millions of foreclosures that continue to bring property values down for all of us.

Now I know this stinks for the rest of us responsible taxpaying, mortgage-paying Americans. Our tax money is going to be used to bail out some really ridiculous decisions made by borrowers, who will have effectively refinanced their homes that they could barely afford in the first place, outfitted their homes with swimming pools, big screen TVs, and god knows what else, and then bail them out. But unfortunately, it beats the alternative of doing nothing.

It would have been really nice if this plan had included something for people who have never missed a mortgage payment, some treat. But it does not. We just have to deal with the fact that the only benefit we will get from all of this is that by mitigating foreclosures, our property values will benefit, or not suffer as much.

Remember, 50% back in default means 50% worked. Maybe this will all be over in 50% of the time it would have otherwise taken!

New First Time Buyer $8000 tax credit details

Don't have all the details yet, but here's what we know so far about the new tax credit for first time homebuyers.

-$8000 (up from last year's $7500 credit), and unlike last year's, this one does not need to be paid back!
-For purchases between January 1st and December 1st, 2009.
-Income limits are $75,000 for individual and $150,000 for couple.
-First time buyers only
-Principal residences only
-No disqualification for using Bond Money.
-If you sell the home in the first 3 years, you must repay it.

*I'm assuming the credit is capped at 10% of the property sale price or $8000, whichever is smaller, like last year's credit (so you can't buy a $10,000 property and get an $8000 tax credit).

More details to come, plus a piece on what I think this will do to the market.