Home Tax Credit changes for 2010

NAR Issue Brief
Homebuyer Tax Credit
®
National Association of REALTORS Government Affairs Division
500 New Jersey Avenue, NW, Washington DC, 20001

Jan 1 – November 30, 2009 November 7 – April 30, 2010
FEATURE Rules as enacted Rules as enacted
February 2009 November 2009
$8000 $8000
First-time Buyer
($4000 married ($4000 married
Amount of Credit
filing separate) filing separate)
May not have had an interest in
First-time Buyer
a principal residence for 3 years
Definition for Eligibility Same
prior to purchase
$6500
Current Homeowner
No Provision ($3250 married
Amount of Credit
filing separate)
Effective Date
No Provision November 7, 2009
Current Owner
Must have used the home sold
Current Homeowner or being sold as a principal
No Provision
Definition for Eligibility residence consecutively for 5
of the previous 8 years
Purchases after November 30,
2009. Purchases after
Termination of Credit
(Becomes April 30, 2010 on April 30, 2010
Date of Enactment.)
So long as a written binding
contract to purchase is in
Binding Contract Rule None effect on April 30, 2010, the
purchaser will have until
July 1, 2010 to close.
Income Limits
$75,000 – single $125,000 – single
(Note: Increased income
$150,000 – married $225,000 – married
limits are effective as of
Additional $20,000 phase out Additional $20,000 phase out
date of enactment of bill)
Limitation on Cost of $800,000
None
Purchased Home November 7, 2009
Ineligible
Purchase by a Dependent No Provision
November 7, 2009
Purchaser must attach
Anti-fraud Rule None documentation of purchase to
tax return

NAR Frequently Asked Questions
Homebuyer Tax Credit Changes
National Association of REALTORS® Government Affairs Division
500 New Jersey Avenue, NW, Washington DC, 20001
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 firsttime 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 firsttime 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.

THE MORTGAGE
Concierge Program
CHAD BERGMAN

Chad Bergman
Tips for a Smooth Loan Approval (303) 733-5950 Ext 248
Chad@ApolloMortgages.com
These DO’s and DON’Ts will help avoid any delays with your loan approval.
The idea of purchasing your first home is bound to bring
• DO continue making your mortgage or rent payments many questions to mind. This is a natural reaction, as it is one of
the biggest decisions you will ever make in your life. Rest
• DO stay current on all existing accounts
assured my team and I are here to assist you in understanding the
• DO continue living at your current residence

R A I S I N G T H E S T A N D A R D S I N T H E M O R T G A G E I N D U S T R Y
loan process with our goal being to make your experience a pleas-

G R E E N W O O D V I L L A G E , C O 8 0 1 1 1

The Purchase Process
• DO continue to use your credit as normal ant one.
• DO please call us with any questions
• DON’T make a major purchase (car, boat, jewelry, etc.) It is the utmost importance to work with an experienced
• DON’T apply for new credit (even if you seem pre-approved) mortgage planner that understands some of the practical aspects
of financial planning. A well-versed consultant will ask you many
• DON’T open a new credit card
questions about your short and long term goals, and assist you in
• DON’T transfer any balances from one account to another choosing a loan program that is truly suited to those goals.
• DON’T pay off any charges offs without a discussion with us first
• DON’T pay off collections without a discussion with us first The process of purchasing your first home is often much
• DON’T buy any furniture more complex than the average individual expects it to be. Items
• DON’T close any credit cards involved in your purchase contract can have a significant impact
not only on the success of your purchase transaction, but on your
• DON’T change bank accounts
stress level as well. We have listed out some of the important
• DON’T max out or over charge on your credit card accounts

S U I T E 1 3 1 0
items you should be aware of, that require you to make a decision
• DON’T consolidate your debt onto 1 or 2 credit cards as a buyer entering into a purchase contract.
• DON’T take out any new loans
• DON’T start any home improvement projects Documents Needed to Apply for a Mortgage
• DON’T finance any elective medical procedures

8 4 0 0 A S T P R E N T I C E A V E .
• DON’T open a new cellular phone account • Two most recent pay stubs
• DON’T join a new fitness club • W-2’s from the last two years and/or Federal tax returns
• Last two months bank statements - all pages

A P O L L O F I N A N C I A L
• DON’T pay off any loans or credit cards without discussing it with us
• Home Owner’s Insurance information
If you encounter a special situation, it is best to mention it to us right away so we can help
you determine the best way to achieve your goals. If applicable:
• Divorce decree or separation papers
• Bankruptcy papers

APOLLO FINANCIAL RAISING THE STANDARDS IN THE MORTGAGE INDUSTRY
8400 AST PRENTICE AVE. SUITE 1310 GREENWOOD VILLAGE, CO 80111

THE FLOW OF A LOAN
Initial Mortgage Consultation Pre Approval Certificate Bid Accepted!
Loan Application Mortgage Planning Session Shopping for a New Home!
Borrower meets with the Loan Officer issues You are Under Contract!
Mortgage Planner takes com- Mortgage Planner meets with
Mortgage Planner to discuss Pre Approval Certificate Selling Agent sends a copy
plete loan application, pull client to discuss credit and Selling Agent takes the client
the loan process, the client’s to the client and Selling
credit, collect required loan approval options. Discusses shopping for a new home. of the Fully Executed (all
needs, long term goals and Agent to use as a negotiation
documents, run various interest rates and cost options Again and again and again... signatures) Sales Contract to
tool when submitting
available loan programs approval options for pre approval. the Mortgage Planner.
3 an offer for a house.
1 2 5 6
4

Submit File to Investor Submits File to Processing Order Appraisal
Processing the File Lock or Float? Property Inspection
Processor reviews and sub- Mortgage Planner compiles Mortgage Planner orders
Loan Coordinator orders the Title, Mortgage Planner discusses Selling Agent schedules
mits the file to the investor’s Survey, Closing loan application, income and appraisal using the fully
lock options with the client. inspection of the property
underwriting department for a asset documentation, sales executed sales contract as Make sure the client gets a
Protection Letter, 24 Month Chain contract, etc and submits to and discusses any objections
Conditional Approval. soon as Selling Agent gives Lock Confirmation in
of Title processor and resolutions with the
(Ave turn time 1-2 days) the ‘OK’ for the inspection.
writing. client.
(Average turn time 2-3 days) (Ave turn time 1-2 days) 7
12 (Ave turn time 3-5 days) 8
11 10
9

11
Underwriting Final Approval
Homeowner’s Insurance Loan Conditions Deadline
Investor’s underwriter reviews Appraisal Deadline Met! Conditional Approval
Processor submits all final Met!
all documents, orders flood Mortgage Planner issues Processor orders the If required, Mortgage
Homeowner’s Insurance conditions to the Once the CTC is received,
insurance, verifies w-2’s and Deadline Met Letter to the Planner requests additional underwriter. Underwriter is-
from the company of the the Mortgage Planner issues
tax returns, verifies client, selling agent and documents from the clients sues a ‘Clear to Close’ and
client’s choice. Appraisal to the Loan Commitment
employment. Underwriter listing agent. and/or agents. transfers the file to the
required to order insurance. Deadline Met Letter to the
issues a Conditional Approval. Investor’s Closing Dept. client, the Selling Agent, and
(Ave turn time 1-2 days) (Ave turn time 1-2 days) the Listing Agent
(Ave turn time 3-4 days) 14 (Average turn time 48 hours)
16 18
13 15
17

Final HUD-1
Closing Confirmation Settlement Statement Order Docs
Closing Instructions
Mortgage planner sends the final HUD-1 and a Title company closer prepares a Loan Coordinator submits a
The Investor’s Closing Dept
Loan Confirmation; including the loan pro- preliminary HUD-1 Settlement Doc Order Request to the
sends the closing
gram, interest rate, funds to close, and closing Statement and sends it to our Loan Investor’s Closing Dept. This
location to the client. If the client is required to instructions and documents
Coordinator and to the Investor’s to the Title Company. details out all broker fees and
bring any funds to the closing, they will need Closing Dept for approval. After broker credits that the
to get a cashier’s check made payable to either changes are made, the final HUD-1
(Ave turn time 48 hours) Mortgage Planner wants to
the title company or to themselves. They can is issued. appear on the HUD-1
also wire the funds to the title company. 20 19
(Average turn time 24 hours)
22
CONGRATULATIONS! 21

THE MORTGAGE
Concierge Program

Fax Transmittal Form
To: From:

Chad Bergman Name:
Senior Mortgage Advisor
Apollo Mortgages Phone:
Phone: 303.733.5950 ext 248
Fax: 303.484.7922 Fax:

Email:
__Urgent
__For Review Date Sent:
__Please Comment Time Sent:
__Please Reply

Number of pages including cover:

Message:

The first step in the Mortgage Concierge Program is for you to review the attached Mortgage Planning
Package, complete the confidential financial overview and fax it to my office as soon as possible. This
will start your loan approval process.

My team will follow-up personally with you and schedule a convenient phone appointment for the
Mortgage Needs Analysis. This step in the program is designed to help you better understand the loan
process and determine which loan best meets your financial needs.

I am looking forward to the opportunity to discuss your loan options in greater detail.
I appreciate you and value your business.

Sincerely,

Chad Bergman
Senior Mortgage Advisor

CONFIDENRIALTY NOTE: The information contained in this facsimile message is being transmitted to and is intended only for the use of
the individual named above. If the reader of this is not the intended recipient, you are hereby advised that any dissemination, distribution or
copy of this facsimile is strictly prohibited. If you have received this facsimile in error, please immediately notify the sender by telephone
and destroy this facsimile message.

Office: 303.733.5950 ext.248 Chad@Apollomortgages.com Fax: 303.484.7922

THE MORTGAGE
Concierge Program

LOAN APPLICATION FORM (1) This is not a loan commitment form

BORROWER INFORMATION Are you ____Married ____ Single ____Divorced ____Separated
Full Name_________________________________________________ Social Security Number _____________________________

Current Home Address _____________________________________________________________ Date of Birth ____/____/_______

City_________________________________________________________________ State _________ Zip ______________

How long have you lived at this address? ___________________________________ Do you _____ own or _____ rent?

Home Phone _____________________________ Cell Phone ____________________________ Preferred # (H)___ (W)___ (C)___

Work phone # ____________________________ Email_______________________________________________________________

If you currently rent an apartment or home what is your monthly payment? $______________________________________________

EMPLOYEEMENT INFORMATION
Current employer ___________________________________________________ Are you self-employed? ___Yes ___ No

Address __________________________________________________________________________________________________

City _____________________________________________________ State __________ Zip ________________________

Title or Job Description ______________________________________________________ Years in this line of work _________

How long have you worked for your current employer? _______ years _______ months

Please describe your compensation (hourly, salary, bonuses, commission, etc.)

Hourly _$_______/ hour you work ________ hours per week (or) Salary _$_________________________/ year

Commission _$_____________________ terms ________________ Bonuses _$____________________ terms _________________

Please list previous and/or secondary employment (we need a total of two years)

Employer ____________________________________________ __Previous __ Secondary Self-employed? ___Yes ___ No

Address __________________________________________________________________________________________________

City _____________________________________________________ State __________ Zip ________________________


What was your start date? __________________________ End Date? ___________________________________





THE MORTGAGE
Concierge Program


CO - BORROWER INFORMATION (if applicable) Are you ___Married ___ Single ___Divorced ___Separated

Full Name_________________________________________________ Social Security Number _____________________________

Current Home Address _____________________________________________________________ Date of Birth ____/____/_______

City_________________________________________________________________ State _________ Zip ______________

How long have you lived at this address? ___________________________________ Do you _____ own or _____ rent?

Home Phone _____________________________ Cell Phone ____________________________ Preferred # (H)___ (W)___ (C)___

Work phone # ____________________________ Email_______________________________________________________________

If you currently rent an apartment or home what is your monthly payment? $______________________________________________

CO-BORROWER EMPLOYEEMENT INFORMATION (if applicable)
Current employer ___________________________________________________ Are you self-employed? ___Yes ___ No

Address __________________________________________________________________________________________________

City _____________________________________________________ State __________ Zip ________________________


How long have you worked for your current employer? _______ years _______ months




Please list previous and/or secondary employment (we need a total of two years)

Employer ____________________________________________ __Previous __ Secondary Self-employed? ___Yes ___ No

Address __________________________________________________________________________________________________

City _____________________________________________________ State __________ Zip ________________________


What was your start date? __________________________ End Date? ___________________________________





THE MORTGAGE
Concierge Program


LIQUID ASSETS
Checking Account Approx Balance $_______________________ Bank___________________________ __Borrower __Co-Bor

Savings Account Approx Balance $_______________________ Bank___________________________ __Borrower __Co-Bor

Retirement Account (401K, etc.) $_______________________ Bank___________________________ __Borrower __Co-Bor

Other: _____________________ $_______________________ Bank___________________________ __Borrower __Co-Bor



REAL ESTATE OWNED
If you own your own home what is the approximate current value? $_________________________________________________

What year did you buy the home? ____________________ What was the purchase price? $________________________________
Are the insurance and property taxes escrowed as part of your monthly payment? ___Yes ___No

If you own a vacation or second home, what is the approximate current value? $_________________________________________

What year did you buy the home? ____________________ What was the purchase price? $________________________________

What is the address? _________________________________________________________________________________________

If you own an investment property, what is the approximate current value? $____________________________________________

What year did you buy the property? ___________________ What was the purchase price? $________________________________

What is the address? _________________________________________________________________________________________
*If you own any other properties, please provide a detailed schedule of real estate owned with this application

OTHER INPORTANT INFORMATION
Auto (1): Make __________________________________ Model___________________________________ Year ______________

Auto (2): Make __________________________________ Model___________________________________ Year ______________

How is your credit history? ___Excellent ___Good ___Average ___Challenged ___ Do not know ___ I have no credit history
Do any of these apply to you? ___Bankruptcy ___Judgments ___Tax Lien ___Divorce ___Child Support

I hereby authorize Apollo Financial to verify my past and present employment earning records, bank accounts, stock holdings, and any other
asset balances that are needed to process my mortgage loan application. I further authorize Apollo Financial to order a consumer credit report
and verify other credit information, including past and present mortgage and landlord references. It is understood that a copy of this form will
also serve as authorization. The information Apollo Financial obtains is only used in processing my application for a mortgage loan.

Borrower Name____________________________________________ Signature___________________________________________

Co-Borrower Name_________________________________________ Signature ___________________________________________


Home Tax Credit changes for 2010

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