TAX CREDIT PROGRAM: Home Buyers Get More Help

MARKET PEAKED IN 2005-06

By Kim Souza

Posted: November 15, 2009 at 7:09 a.m.

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SPRINGDALE — Realtors, lenders and builders across Northwest Arkansas smiled for the past week after President Obama approved extending the federal homebuyer tax credit through April.

The amended program also includes those who owned their residence for five of the past eight years.This expanded program will benefi t more Arkansans than the previous credit and many homeowners can relocate with the help of the expanded tax credit up to $6,500, said Todd White, Arvest Mortgage loan production manager.

Vicki Briolat of Pea Ridge is one of those who could benefi t.

“This is an awesome opportunity for me to sell my house and recoup the $5,000 I would have to take tothe closing table if I sold at today’s market prices,” Briolat said.

She refinanced her mortgage at the housing market peak in 2005-06, pulled out equity to reduce the family’s debt and got a second mortgage. Briolat didn’t anticipate her home’s value would drop below the new mortgage amount.

A licensed real estate agent herself, Briolat said she can think of 6,500 reasons to sell her house nowand move into a newer home.

“This is a once-in-a-century opportunity. I plan to list my home between $125,000 and $130,000, which is spot-on for my neighborhood where homes are selling. At that price, I can clear my two mortgages and cover closing,” Briolat said.

While Briolat is not a distressed seller, there are dozens of families across the region unable to maintain the homes they purchased in recent years, according to Maribel Tapia, housing counselor at the Economic Opportunity Agency in Springdale.

“This extension will also benefi tthose families who were working on their credit scores, giving them a little more time to get eligible. But more importantly, it creates a new buyer pool that could help more distressed homeowners get a sales contract,” Tapia said.

She said the tax credit is the perfect motivation to keep buyers coming. “We couldn’t be happier about the expanded credit and feel it will have a significant impact on returning the real estate market to health,” said George Faucette, president of Coldwell Banker Faucette Real Estate.

He said the expanded home buyer credits should help reduce home inventory, as more buyers come to the market.

The National Association of Realtors estimates every home sale adds $57,000 and $60,000 to the local economy, with a direct impact of roughly $20,000 to Realtors, home appraisers, inspectors, insurers and mortgage lenders, Faucette said.

White agreed the original tax credit, set to expire at the end of November, helped reduce excess supplies in lower price categories. He is optimistic the expanded version will keep his loan origination department busy through what is typically a slower season.

Home builders are also excited about the benefitsof the new expanded credit.

“I only wish it had some provision for backdating for those families who just recently closed new home deals and got no government incentive to do so,” said Sean Morris, contractor for Walker Brothers Construction in Centerton.

He said as the original program got closer to expiration, they had no vacant homes to sell and he is happy to see the new program will give buyers more time to shop.

“We will close 100 new home deals this year and are anxious to get started in 2010 with these record low interest rates and now the extra money back in buyers’ pockets. I can’t imagine a better a time to buy a first home or trade up to a newer home.” Morris said.

News, Pages 22 on 11/15/2009

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The true unemployment rate might be a bit cloudy, especially if you factor in the underemployment rate. Underemployment is a condition in which a person has to work part time without electing to, is unable to find work though searching for it, or a job which they are overqualified for, and if factored in, it's believed the unemployment rate is closer to 27%. In response to the rising unemployment rate, an unemployment benefits extension has been attached to the homebuyer tax credit extension bill, extending benefits to up to 20 weeks or more, for those who qualify.

Posted by: IsabellaD

November 17, 2009 at 9:52 p.m. ( permalink | suggest removal )