California announced it’s own, $10,000 tax credit for any homeowner buying a new home between March 1, 2009 and March 1, 2010 regardless of whether they’re a first-time buyer or not. This comes on top of the federal first-time home buyer tax credit of $8,000 announced by the Obama administration as part of the federal stimulus package. Unlike the federal bill the California home buyer tax credit does not have restrictions on income qualifications, nor do you need to be a first time buyer to participate. The only restriction is that the home be new construction and be purchased between March 2009 and March 2010.  

While it is still unclear exactly how the California Home Buyer Tax Credit program will work, here is what we do know:

• Eligible on NEW homes purchased between March 1, 2009 and March 1, 2010 (must be new construction to qualify)
• $10,000 credit paid in 3 annual installments of $3,333.  Home buyers get the $3,333 off their taxes for the first three years after purchasing the new home.
• No income restrictions, meaning that all home prices and incomes can participate.
• Any home buyer buying a new home qualifies.  You do not have to be a first-time buyer as in the Federal Home Buyer Tax Credit.
• Pending escrows or recent home sales have not been determined to be eligible at this point, although it will be determined shortly.
• The total credit is $100 million (h/t CR) which works out to 10,000 home sales that would qualify under the California Home Buyer Tax Credit program.

Politics aside, this seems like a bad idea for Santa Clara Valley.   We have a fundamental problem of high supply and low demand in Santa Clara Valley, a very high proportion of which are older homes.  This may take away buyers from those older homes and pursuade them to buy into new developments that should never have come to be.

From all the new developments out there: Summerhill – Village Square, Shea Builders – Mondrian, Shea Builders – Boulevard, Toll Brothers Verona, KB – Cannery Row, KB – Monte Vista, AXIS, Regency Homes – Gables End, Regency Homes – Altaire, 360 Residences, The 88, and City Heights.  There have been price drops and incentives some better than others. 

As a home buyer for a new development make sure you understand that you can write your own offer and negotiate the terms and conditions of what the builders sales department are quoting you.  If you are not a good negoitator make sure your agent is, so you can get the best deal out there.

Similar Posts:

• First Time Home Buyer Programs: Santa Clara
• Rebuilding Your Credit
• Energy Saving Tax Credits
• Closed Short Sale in Rivermark Park Development
• Negotiating a New Construction Townhome in Mission Place

With the economy in it’s current state and the housing market seen as the culprit, you can expect that the government is focusing on stimulating housing and home buying.  As a first time home buyer you are already guaranteed an $8000 tax credit if you purchase between January first and November of 2009.

Here is a local first time home buyer program offered by the City of Santa Clara.  It is a $75,000 dollar second mortgage provided by the city towards the purchase of a home in Santa Clara.  Here are some more details below:

City of Santa Clara 1st Time Home Buyer’s Financing Program

How Does The Financing Program Work?
The Financing Program helps first time home buyers purchase a single-family house, town home, or condominium located in the City of Santa Clara.

Who Is Eligible?
People who have not owned a home in the last three years, People whose annual household income is no greater than 120% of the County’s median income (as calculated based on your household size).

What is the maximum assistance amount?
The maximum City second mortgage is $75,000.

Minimum Down Payment Requirement:
3% of the purchase price, more may be required to qualify

What Are The Terms Of The Second Mortgage?
The City’s second mortgage will be a 20-year loan structured in the following way:
For the first 5 years, the City’s loan will be zero percent interest with no payments;
Starting the sixth year through the twentieth year, the City loan converts to the interest rate of the primary loan, and monthly amortized payments of principal and interest are paid.

Is there any equity share with the city if I sell my home?
No, terms are as above.

What loan programs can I go through? Can I refinance if rates come down?
You can go through any approved conventional 30 year fixed mortgage including FHA or CALHFA for the first mortgage. Yes you can refinance as long as it’s a fixed mortgage and no cash out other than to pay off the city loan.

What kind of interest rate can I expect on the first loan?
The interest rates are market rates determined based on the first mortgage guidelines on credit scores and down payment based on program guidelines.

What is the process to get this program?

1. Get pre-qualified to determine maximum purchase price and loan amount (apply online or request application)
2. Provide supporting income and asset documentation
3. Once your pre-approval letter is issued, go out and look for your home!
4. Once you are in contract to purchase, the escrow period to close will take a normal 30 day time frame to close
    

Schedule of 2006 income limits-120% of median income adjusted to family size:

Household Size Maximum Income

•  1 – $ 88,600
•  2 – $101,300
•  3 – $113,900
•  4 – $126,600
•  5 – $136,700
•  6 – $146,900
•  7 – $157,000

To get started download the prequal application:  santa-clara-first-time-home-buyer-prequal

Similar Posts:

• How the California NEW HOME Tax credit Affects the Santa Clara Valley
• Rebuilding Your Credit
• Rivermark, Santa Clara NOD – Notice of Defaults
• Energy Saving Tax Credits
• Rivermark Notice of Defaults, Notice of Trustee Sale and Bank Owned