Time is running out for first-time home buyers to take advantage of the $8,000 federal tax credit.The credit, part of the stimulus package passed by Congress in February, ends Nov. 30 and applies to home purchases that close by that date.According to www.irs.gov, the $8,000 tax credit is available for first-time home buyers, or people who haven’t owned a home in the past three years, and whose income is $75,000 or less for single taxpayers and $150,000 or less for married taxpayers. The credit is calculated as 10 percent of the home’s purchase price or $8,000, whichever is less.With closings taking 30 to 45 days to complete, “We’re really down to the wire,” said Amanda Vignery, a representative of Platinum Group Realtors.”This subject is near and dear to my heart,” said Vignery, who lives in Falcon. “I like the sense of community there. I like the place peoples’ hearts are in, and the tax credit could be an important benefit to us as a community.”Vignery said some people don’t know about the credit.”The National Association of Realtors found that 52 percent of first-time home buyers didn’t know about the credit,” said Kevin Sullivan, branch manager for Cherry Creek Mortgage Co. in Colorado Springs.Some don’t understand how the credit works.Upon closing on a home, a form is sent to the Internal Revenue Service and from three to five weeks later the IRS sends the home buyer a check for $8,000, said Betsy Thinger, broker associate for Reardon Partners in Colorado Springs.If 125 people were to take advantage of the $8,000 home buyers’ tax credit before it expires, they could put a million dollars into our local economy, Sullivan said.”They could buy a car, furniture, some window treatments or pay off debt. There’s all kinds of things people can use this money for,” he said.Adam Shwarts will probably buy a door.After renting in Colorado Springs for three years, Shwarts just moved into his first home, once a bank-owned property, which is missing a door and has a few electrical outlets that don’t work.The $8,000 first-time home buyer credit added to Shwarts’s decision to buy now. Without it, he said, “I would probably have taken a little longer.”Debbie Reardon, real estate broker for Reardon Partners, said first-time home buyers could be instrumental in getting the economy moving in Colorado Springs.”It actually helps create sales in all price ranges. House selling drives everything. It drives all other businesses,” she said.And the housing market is up from last year.”For the first time in 36 months, July sales were better than July last year,” Reardon said. “This year, August was better than August a year ago, and we think September will be even better.”Inventory is going down for the very first time in 36 months. With more sales and lower inventory, house prices are likely to start going up in the spring. We think we’ve hit rock bottom on pricing.”After the credit crisis, many people don’t know they’re qualified to buy a home, but loans are available, Sullivan said.Many first-time home buyers are using a Federal Housing Authority loan, combined with Colorado Housing and Finance Authority down payment assistance, he said. Home buyers are also using Veterans Administration loans and conventional loans.FHA loans require a credit score of 620, and the loan amount is limited to $325,000 with a minimum down payment of 3.5 percent of the purchase price, which would be $6,300 for a $180,000 house, Sullivan said.He said with CHAFA down payment assistance and closing costs paid by the seller, home buyers can “literally get into a house for $1,000.”CHAFA accepts non-traditional credit histories, such as rent, utilities and phone payments as qualifying points.Many people don’t realize they can qualify, Sullivan said.Reardon Partners will hold a seminar on the tax credit on Saturday morning, Oct. 10, at Mr. Biggs on Mark Dabling Boulevard.
