Cranewoods Development LLC » Real Estate Loans

Incentives to Avoid Foreclosure

lewis — Tue, 06 Apr 2010 17:09:27 +0000

The Federal Government recently announced new incentives for homeowners underwater with their current mortgage to work with their bank on a “short sale.” The new rules give timelines and parameters that offer confidence to lenders who have too often been stuck in an undefined and time consuming processes. The Obama Administration’s aim is to lessen the credit ruining aspects of a foreclosure and give homeowners and lenders a start at moving forward with the least pain.

Lenders lose about 40 percent of a property’s value on a foreclosure vs. about 19 percent on a short sale, according to industry estimates.

The program also offers $3000 in moving costs to the homeowner and some mortgage support if the owner moves into HUD approved housing. Read more about it here.

Incentives to Avoid Foreclosure is a post from: Cranewoods Development LLC

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Receivers and Receivership

Andy Howe — Wed, 03 Feb 2010 15:22:16 +0000

Here’s a good resource if your real estate development or investment runs into some trouble and you or your lender think you may need a court appointed receiver.

A court appoints a receiver only after both sides of the litigation are given an apportunity to give input upon the specific receiver and the goals of the receivership. In real estate, those goals could be as diverse as selling the property to completing construction to financial analysis and auditing.

The Court and Receiver
The litigants counsel define the skill set needed in a receiver for their particular property and identify an agreed upon receiver. But once the court accepts their choice, the receiver is an extension of the neutral court.

“Parties with an interest in the receivership should treat the receiver as an arm of the court and should not seek ex-parte communications with or special treatment by the receiver.”

What to look for in a receiver

“A receiver should be chosen on the basis of background, expertise, neutrality, availability, compensation rate and temperament, and not because of perceived alliances and relationships.”

What you need to know
If you think your situation may require a receiver, go read the clear yet short article and learn more about the process and what you may need to look for. Your familiarity will aid you and your counsel in choosing the right path and goals of the receivership in your specific situation. PDF on Court Appointed Receiver here.

Receivers and Receivership is a post from: Cranewoods Development LLC

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The VA Purchase Loan Has Many Advantages

admin — Sat, 16 Jan 2010 01:20:39 +0000

Buying a house but not sure what you’re going to use to finance the purchase given today’s climate in the mortgage market?

If you’re a veteran or active duty military, then you must consider a VA Loan, a benefit thanks to your service to the United States. A VA Loan is a great option for buying a home, whether it’s your first or your third time buying a house; the VA Loan gives you flexibility as well as offers an affordable solution to financing your next purchase.

Perhaps the biggest highlight of the VA Loan is the no down payment requirement. Sure, there were plenty of no down payment options 24 months ago, but like the housing bubble, those programs burst and now the VA Loan is the last zero-down mortgage product available. In addition to zero down, the VA Loan also has no private mortgage insurance, which is standard on conventional loans unless you put 20 percent down. Another aspect of the VA Loan is the relaxed credit requirements that still allow you to get a low interest rate. While most conventional products require a 720 or above to get the lowest rates, VA lenders generally only require a 620 minimum credit score, and the rates for those scores are still the lowest available.

The VA Loan also allows you to refinance into a lower interest rate (down the line) without appraisal or income documentation; said Jake Vehige, VA Loan Specialist with VAMortgageCenter.Com.

There is a VA funding fee associated with a VA Purchase Loan, however that fee is 2.15% of the loan amount for first-time VA users and 3.3% for subsequent VA Loan use. That fee can be rolled into the cost of the loan, or the seller is allowed to pay for it as well. Borrowers who can document at least a 10% service-connected disability are exempt from the funding fee.

Provided you’ve got good credit, doesn’t have to be great, you were honorably discharged and you’ve had steady income for the past two years, a VA Loan is definitely worth your consideration when purchasing your next home.

The VA Purchase Loan Has Many Advantages is a post from: Cranewoods Development LLC

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Tax Credits working for Homeowners, First Time Buyers and the Economy

Andy Howe — Thu, 14 Jan 2010 01:22:34 +0000

A recent study and market analysis show the extension of the first-time home buyer tax credit and the addition of credit for existing homeowners is working for our economy. But the credits are set to expire in April and interest rates are beginning to rise from their near historic lows so the time to buy is now.

“Twenty percent of homeowners are more likely to consider purchasing a home than they were six months ago, thanks to the revised $6,500 federal tax credit, according to the survey.”

Coldwell Banker conducted the survey of over a thousand homeowners and found that the vast majority planned to use the money on “smart spending” that pays off existing debts, goes to home improvements, savings and household expenses. All of which aid our economy by increasing consumer confidence. That’s good news for existing homeowners.

“This may mean the move-up buyer is back in the marketplace,” said Jim Gillespie, chief executive officer of Coldwell Banker. “We’ve got a strong market for the first-time buyer and a strong market for investors. The move-up buyer has been sitting on the fence but hopefully the $6,500 tax credit will stir him to contact a realtor.”

Tax Credits working for Homeowners, First Time Buyers and the Economy is a post from: Cranewoods Development LLC

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Fannie Mae helping Florida’s condo market

lewis — Thu, 14 Jan 2010 01:13:56 +0000

Due to Florida’s great weather, abundance of beautiful coastal properties, it’s livability for residents, and attraction to retirees and vacationers, Florida has always had more condominiums than almost every other state in the country. Unfortunately, in the recent downturn, what’s considered a plus by many has become caught up in the economic turmoil like everything else. Fannie Mae has finally recognized that fact and is now offering more attention to condominiums in Florida and is looking to add a “special approval” to aid the market.

“Our state is probably the hardest hit as far as the condo market is concerned, and Fannie Mae’s new effort to take a closer look at project eligibility could go a long way to putting projects back on a healthy financial track,” says Moe Veissi, National Association of Realtors® First Vice President.

Adds Karen Pallotta, Executive Vice President, Fannie Mae, “This new initiative is geared toward providing maximum support for Florida’s distressed condo market as we continue to provide liquidity to the housing market more broadly.”
Good news for Florida condo buyers and sellers! Go read the whole article about how Fannie Mae is helping the Florida condo market.

Fannie Mae helping Florida’s condo market is a post from: Cranewoods Development LLC

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Prices to bottom, rates to raise but still a Buyer’s Market

Andy Howe — Mon, 11 Jan 2010 14:35:01 +0000

Real Estate is seeing historically low prices, especially in the luxury and near luxury market. Prices are at or extremely near the lowest they will ever be but mortgage rates are beginning to rise and aren’t expected to return to the low rates we’ve seen over the last few years. Here is a very good article about what’s going on nationally in the real estate market that also addresses some regional variations. There are a number of good points for potential buyers and many that directly effect Florida buyers.
Read the whole thing but this is a very important point on the overall trend of the buyer’s market:

“You don’t need to have a sense of urgency, but understand that as time progresses the balance of power as we get into 2010 is going to slowly but surely shift away from [buyers],” Larson says. “It is not going to be a strong seller’s market, but it will be more evenly distributed as the year goes on.” Data from the real estate firm Zillow show that home buyers are already losing the leverage they once enjoyed.

Combine this information with the first-time and homeowner tax benefits that will be expiring in June, 2010 and you can see it’s still a buyers market but the window is closing.

Prices to bottom, rates to raise but still a Buyer’s Market is a post from: Cranewoods Development LLC

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$8,000 First Time Homebuyer Tax Credit Explained

admin — Fri, 01 Jan 2010 01:01:17 +0000

The first-time homebuyer credit is a new tax credit included in the recently enacted Housing and Economic Recovery Act of 2008.

For homes purchased in 2008, the credit operates like an interest-free loan because it must be repaid over a 15-year period.

The credit was expanded in 2009 for homes purchased in 2009, increasing the amount of the credit and eliminating the requirement to repay the credit, unless the home ceases to be your principal residence within the 36-month period beginning on the purchase date.

Q. How much is the credit?

A. The credit is 10 percent of the purchase price of the home, with a maximum available credit of $7,500 ($8,000 if you purchased your home in 2009) for either a single taxpayer or a married couple filing a joint return, but only half of that amount for married persons filing separate returns. The full credit is available for homes costing $75,000 or more.

Q. Which home purchases qualify for the first-time homebuyer credit?

A. Any home purchased as the taxpayer’s principal residence and located in the United States qualifies. You must buy the home after April 8, 2008, and before Dec. 1, 2009, to qualify for the credit. For a home that you construct, the purchase date is considered to be the first date you occupy the home. Taxpayers (including spouse, if married) who owned a principal residence at any time during the three years prior to the date of purchase are not eligible for the credit. This means that you can qualify for the credit if you (and your spouse, if married) have not owned a home in the three years prior to a purchase. If you make an eligible purchase in 2008, you claim the first-time homebuyer credit on your 2008 tax return. For an eligible purchase in 2009, you can choose to claim the credit on either your 2008 or 2009 income tax return.

Q. Can I apply for the credit if I bought a vacation home or rental property?

A. No. Vacation homes and rental property do not qualify for this credit.

Q. Who is considered to be a first-time homebuyer?

A. Taxpayers who have not owned another principal residence at any time during the three years prior to the date of purchase.

Q. How do I apply for the credit?

A. The credit is claimed on new IRS Form 5405, First-Time Homebuyer Credit, and filed with your 2008 or 2009 federal income tax return.

Q. Are there income limits?

A. Yes. The credit is reduced or eliminated for higher-income taxpayers. The credit is phased out based on your modified adjusted gross income (MAGI). For a married couple filing a joint return, the phase-out range is $150,000 to $170,000. For other taxpayers, the phase-out range is $75,000 to $95,000. This means that the full credit is available for married couples filing a joint return whose MAGI is $150,000 or less and for other taxpayers whose MAGI is $75,000 or less.

Q. I purchased a home that qualifies for the first-time homebuyer credit. I will be renting two of the bedrooms and reporting the rental income on Schedule E. Will I still qualify for the credit if I use the home as my principal residence?

A. Yes, if you meet all first-time homebuyer eligibility requirements. See Form 5405, First-Time Homebuyer Credit, for more details.

Q. If two unmarried people buy a house together, how do they determine how much each may take of the credit?

A. IRS Notice 2009-12 provides guidance for allocating the first-time homebuyer credit between taxpayers who are not married.

Q. I am a single co-owner of a home. How do I get this credit?

A. Depending on the year of purchase, you will claim the credit on either your 2008 or 2009 federal income tax return.

Q. I don’t owe taxes and/or my income is exempt from tax and I do not have a filing requirement. Do I qualify for the credit?

A. The credit is fully refundable and, if you qualify as a first-time homebuyer, having tax-exempt income will not preclude eligibility. Although there are maximum income limits for qualifying first-time homebuyers, there are no minimum income criteria. Thus, someone with no taxable income who qualifies as a first-time homebuyer may file for the sole purpose of claiming the credit for a refund.

Q. Does the first-time homebuyer credit apply to homes located in the U.S. Territories?

A. No.

Q. Would I be considered a first time homebuyer if I owned a principle residence outside of the United States within the previous three years?

A. Yes. A taxpayer who owned a principal residence outside of the United States within the last three years is not disqualified from taking the credit for a purchase within the United States.

Q. If qualified, are homebuyers required to claim the first-time homebuyer credit?

A. No.

Q. Does previously inheriting a home and living in the inherited home automatically disqualify an individual as a first-time homebuyer with respect to a different home that is purchased; within the prescribed 2008 and 2009 time frames?

A. Yes, an ownership interest in a prior principal residence would preclude the taxpayer from being considered a first-time homebuyer. As long as the taxpayer owned and used the prior home as his principal residence; then he is not a first-time homebuyer. There is no exception for taxpayers who did not buy their prior residences.

Q. Is a step-relative considered a related party?

A. Step-relatives are neither ancestors nor lineal descendents and are therefore not related persons for purposes of the first-time homebuyer credit.

Q. If I claim the first-time homebuyer credit in 2009 and stop using the property as my main home before the 36 month period expires after I purchase, how is the credit repaid and how long would I have to repay it?

A. If, within 36 months of the date of purchase, the property is no longer used as the taxpayer’s principal residence, the taxpayer is required to repay the credit. Repayment of the full amount of the credit is due at that time the income tax return for the year the home ceased to be the taxpayer’s principal residence is due. The full amount of the credit is reflected as additional tax on that year’s tax return. Form 5405 and its instructions will be revised for tax year 2009 to include information about repayment of the credit.

Q. If a person does not actually make the payments on a home that’s their primary residence, but the deed and mortgage documents are in their name, can they be considered a first-time home buyer?

A. Yes. If a taxpayer purchases the home to be used as a primary residence from an unrelated person and has not owned a home within the previous 36 months, the taxpayer is eligible for the first-time homebuyer credit regardless of who makes the mortgage payment.

Q. Do taxpayers affected by Hurricane Katrina; or other disasters qualify as first-time homebuyers if their principal residence (i.e. main home) became uninhabitable more than three years ago and they have not formally disposed of the uninhabitable home or purchased or built a new home in the interim?

A. A first-time homebuyer is an individual (and the individual’s spouse, if married);who has not had an ownership interest in a principal residence within the meaning of Section 121 of the Internal Revenue Code during the three years before the date a new principal residence is purchased. Applying Section 121, a taxpayer can be a first-time homebuyer if the taxpayer has not owned and used a property, a principal residence at any time during the three years before the date of purchase of the new residence. Taxpayers affected by Hurricane Katrina who have owned but not used their property as a principal residence within the last three years may be eligible for the first-time homebuyer credit when they purchase a new principal residence.

SOURCE: Internal Revenue Service Newsroom

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Groups Investing in Real Estate

admin — Wed, 16 Dec 2009 00:53:16 +0000

One of the developing trends in real estate is investing as a group in real estate.

Some of the best investments can be found in oceanfront homes, beachfront and oceanfront condominiums and contemporay lofts.

The advantages of investing in real estate as a group include:

Spreading the investment between several people to minimize cash outlay
Opportunity to use the property for vacations
Income potential for waterfront rentals
Immediate equity by purchasing property at a discount from the developer

Cranewoods” properties are perfect candidates for group investors. In addition to providing great values, unique projects and fantastic locations, Cranewoods can assist the groups in structuring their relationship through referral to attorneys and accountants that are familiar with that area of practice. The result is a painless method for group investing.

Groups Investing in Real Estate is a post from: Cranewoods Development LLC

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