The federal government stopped their generous tax break of $8000 at the end of April of 2010 but in California at least, first time home buyers have another choice. The state of California, under an initiative from glad-handers and Governor Arnold Schwarzenegger have extended and expanded the California first time home buyers ‘ tax allowance to $10,000 at least through 2011. This is good news for many Californians and essentially covers more than first time house purchasers but to all who purchase new or existing homes this coming year. This brilliant inducement should help to refresh a home buying market which has dropped precipitously in the last 2 to 3 years because of the bursting of the real estate market bubble.
For first time house buyers there has never been a better time to buy though they need to manage their expectations. Home values have dropped in California and interest rates are at all time lows. The primary problem remains the availability of credit and the fact that banks have made it really troublesome for borrowers to qualify. This was a reaction to the too loose lending practices of the past decade which led straight to the wave of repossessions that have endangered our economy. Banks have cash to loan, but they have placed super tight restrictions on giving loan approvals. Most banks require really high credit ratings and steady, rock-solid work as well as seasoned assets.
There are a lot of first time home buyers down payment assistance programs available, particularly in California that are well worth looking into. In the San Francisco Bay Area plenty of the counties and cities have cooperated on bringing these great programs to customers. In the City of Alameda as an example, first time home purchasers who have a combined household income of less than 80% of the mean income for the county may qualify for a loan amount maximum of $80,000. The payments are deferred for 15 years at which time there is a balloon payment due. No interest is charged for the first 5 years and after the town takes a share of shared appreciation. This is a second position loan.
In the town of Antioch, where it is possible to get a huge house for little cash, first time home purchasers may qualify for down-payment help of nearly $30,000. Once more there is a shared appreciation clause that allows the purchaser to sell the house at a future date and pay a portion of the accumulated appreciation equity back to the town.
Besides the city programs, the state of California under the CalHFA dept offers great help programs like CHDAP which will give up to $15,000 in assistance for first time home buyers. You may also stack all these programs including MCCs or Mortgage Credit Certificates which are credits of 15% of the interest payments made on home loans. This helps many borrowers to qualify by effectively raising their take home pay.
To find out more about new homes sales incentives visit the net property and property resource at Which Property Mentor