The AmericanRecovery and Reinvestment Act

of 2009 reinstated2008 loan limitsfor Federal Housing Admin-istration (FHA)

loans and“conforming”

loans fromFreddie Mac and

Fannie Mae. Bear in mind,the limits vary by area.

The current limits areequal to the greater of 125%of the 2008 local-area median HOUSING STIMULUS

What Buyers, Sellers And Homeowners Need To Know Now

Deduction For PrivateMortgage Insurance Good Through 2010

In 2008, Congress extended the deduc-tion for payments of qualified homemortgage insurance to homespurchased through December 31,2010. (The opening date for thededuction is January 1, 2007.)

The full deduction is available to taxpayers withAdjusted Gross Income(AGI) not greater than$100,000, or $50,000 formarried filing sepa-rately. Above thoseAGIs, the deduction isphased out and disap-pears completely forAGIs of $110,000 andhigher ($55,000 for married filing separately).

In order to take thededuction, you must itemize deduc-tions on your tax return — see instructionson Schedule A (Form 1040) or consultIRS Pub. 936 for further details. Also, besure to consult a professional tax advisor.

ST I L L IN EFFECT

New Maximum Limit For FHA,Conforming Mortgages In 2009

You Can Help Us Help OthersPlease pass this Special Issue of our newsletter on

to friends and relatives when you’ve finished reading it. It may contain some critical information for their uniquehousing concerns. Of course, we’ll be happy to providethem with exactly the professional services they’relooking for. As always, we thank you for all your referrals!

home price or $271,050 forFHA and $417,000 for Fannieand Freddie — except for designated high-priced areas.While the Housing andEconomic Recovery Act of2008 had placed the 2009upper limit for high-pricedareas at $625,500, the mostrecent legislation increased the2009 cap for expensive areas to$729,750. These limits are setto expire December 31, 2009.

To find out about the localloan limits where you areinterested in buying or refi-nancing, just give us a call.

I f you’ve been tracking the housing news like we have over the past couple of years, you’ve no doubt heard about the many newgovernment programs and initiatives designed to help stabilize the

nation’s housing market.From the Mortgage Forgiveness Debt Relief Act of 2007 to the Housing

and Economic Recovery Act of 2008 to this year’s American Recovery andReinvestment Act, the government has devised policies to ease the finan-cial situation of those affected by foreclosure, to help people stay in thehomes they own and to encourage home purchases by qualified buyers.Most recently, President Obama’s Homeowner Affordability and StabilityPlan, announced in February, offers yet more opportunities for home-owners who have had difficulty refinancing their homes or are at risk oflosing their homes to foreclosure.

Could any of these new programs help you? We’ve dedicated this specialissue of your newsletter to help you find out if — and how — you can takeadvantage of the new opportunities to buy a home, save money as a home-owner or ensure that your mortgage payments are affordable.

Latest Updates: The information provided here may change by publica-tion time, so be sure to call us for updates or for answers to any questionsyou may have. We’ll be happy to talk with you! Of course, we alwaysrecommend consulting a qualified tax professional or financial advisorabout your particular financial situation.

H IGH -COST AREAS

SPECIAL

STIMULUS ISSUE© Gooder Group, Fairfax, VA 2009. All Rights Reserved. CHR Vol. 14, No. 6.

Images © Stockbyte, © Comstock, © Master Series.This is not intended as a solicitation of another broker’s client or listing.

MAKING MATTERS BETTER to buy or improve a principal residence(rather than a second home), and the exclusion only applies to indebtednessforgiven from January 1, 2007 throughDecember 31, 2012.

The excludable amount of debt islimited to $2 million or $1 million formarried filing separately.

Other restrictions apply, so be sure toconsult a knowledge-able tax professionalfor all the details. You can also go onlineto www.IRS.govand enter the words“Mortgage ForgivenessDebt Relief Act” inthe search window.

A newly revisedForm 982 is used forreporting the exclusion.

Forgiven Mortgage DebtNo Longer Taxable

The Mortgage Forgiveness Debt ReliefAct of 2007 changed tax rules so thatwhen mortgage debt is forgiven by alender — as in a shortsale, foreclosure ordebt restructuring of a property — theamount forgiven is not considered part ofthe taxpayer’s grossincome and thereforenot subject to incometax, as had been thecase previously.

The debt must have been incurred

Agent NameREALTOR®

OFFICE: XXX-XXX-XXXXCELL: XXX-XXX-XXXX

You@YourSite.comwww.YourSite.com

LONG & FOSTER® REAL ESTATE, INC.Your Office AddressCity, State ZIP

********AUTO**MIXED AADC 170 6DAN HOMEOWNER1615 N KENILWORTH STARLINGTON VA 22205-4821

PRSRT STDU S. Postage

PAIDPermit No. 356

17407

!222054821158!

voluntarilylowers theinterest rateso themonthlymortgagepayment isno more than38% of thehomeowner’spre-taxincome.(Loanservicersowned byfinancialinstitutionsthat receive

money from the second distri-bution of bailout funds will berequired to make loan modifi-cations according to TreasuryDepartment guidelines. Loanmodifications are consideredon a case-by-case basis.)

• The government willthen match with the lender

Help For MortgageRefinancing,Modifications

In effect starting March 4,2009, the Homeowner Affordability and Stability Plan involves two programsaimed at helping 7 to 9 million homeowners who are making a good-faith effort to stay current on theirmortgage payments.

1. Increasing AffordabilityThis program is designed

to help 4 to 5 million working homeowners whohave “conforming” mortgages(guaranteed or owned byFannie Mae and Freddie Mac),who have been on time withtheir payments, but who havebeen unable to refinance to alower interest rate becausetheir homes have decreased in value such that their equityis less than 20%. The objec-tive of this plan is to helpthese borrowers refinance into safer, more-affordablefixed-rate loans.

Features and qualifications:

• Allows eligible home-owners to refinance theirhomes to a 15-year or 30-yearfixed-rate loan according to Treasury Department guidelines.

• Available for qualifiedprincipal residences, secondhomes, small rental properties.

• First-lien loans must have an unpaid principalbalance of $729,750 or less (for single-family homes).There is no minimum or maximum loan-to-value ratiofor eligibility purposes.

• Eligible homeownersmust have sufficient income to make the new payment.

Your lender (or loanservicer) can tell you whetheryour current mortgage isowned or guaranteed by

Fannie Mae or Freddie Mac andwhether you canqualify for this refi-nancing opportunity.

2. HomeownerStabilityInitiativeThis program

aims to help 3 to 4million “at risk”homeowners who have highmortgage debt compared toincome and/or who are“underwater” (with acombined mortgage balancehigher than the currentmarket value of the home).The primary objective of theplan is to help borrowers avoid foreclosure by modify-ing unaffordable loans toachieve a payment theborrower can afford. Delin-quency is not required foreligibility. Thegovernment hasset aside $75billion in fund-ing to supportthe program.

Features andqualifications:

• Home-owners canseek a loanmodificationfrom theirparticipatinglender (or loanservicer).

• Yourmonthly mort-gage paymentmust be greaterthan 31% ofyour monthlygross income.

• If you havemore than onemortgage onthe home, only the first mortgage is eligible for modification.

• Homeowners with total“back end” debt (whichincludes not only housingdebt, but other debt such ascar and education loans andcredit-card debt) equal to 55%

Improved First-Time Buyer Tax CreditFREE MONEY

The American Recoveryand Reinvestment Act of 2009improved on an earlier taxcredit available to first-timehome buyers. The new taxcredit is worth up to $8,000(or up to $4,000 for marriedfiling separately) for qualifiedbuyers who purchase a principal residence afterDecember 31, 2008 but beforeDecember 1, 2009. Qualifiedbuyers are those who have not owned a principal resi-dence during the previousthree years.

Good news: Unlike theprevious $7,500 tax credit,this new $8,000 incentive is atrue rebate and does not haveto be repaid providing thehome continues to be yourprincipal residence for at least36 months.

Qualified first-time buyers who purchased homesfrom April 9, 2008 throughDecember 31, 2008 can stilltake up to a $7,500 ($3,750 for married filing separately)tax credit, but must repay thecredit over 15 years beginningtwo years after the purchasesettlement/closing date. If thehome ceases to be your princi-pal residence before the creditis repaid, the unpaid balance

Count On Our Timely ServiceThere’s nothing worse than learning critical information after

you really needed it. We’re here to help keep you up-to-date on everything related to buying, selling or staying in a home.Simply call us at the number(s) on page one whenever you havequestions about homeownership. It’s our privilege to serve youwith all the local housing information and services you need.

or more of their income willbe required to agree to enter aHUD-approved counselingprogram (at no cost to thehomeowner) as a condition forthe loan modification.

• The participating lender

any further reductions ininterest payments, dollar-for-dollar, to bring the homeowner’s payment down to 31% of pretaxincome. (Lenders could alsobring down monthlypayments by reducing theprincipal owed on the mort-gage, with the governmentsharing in the costs.)

• The lender must keep the new lower interest rate in place for five years, afterwhich it could gradually

be stepped up to theconforming loan rate thatwas in place at the time ofthe modification.• The government will

provide a number of incentivefees to lenders and loanservicers along with a partial guarantee initiative(insurance fund) designed todiscourage lenders fromopting to foreclose on mort-gages that could be viable now out of fear that homeprices will fall further.

• To provide extra incen-tive for borrowers to keeppaying on time, the initiativeprovides a monthly balancereduction payment that goesstraight toward reducing theprincipal balance of the loan.As long as a borrower stayscurrent on the loan, he or shecan receive up to $1,000 eachyear for five years.

If you think you mightbenefit from either of thesetwo programs, contact yourlender (or loan servicer) or a HUD-approved housing counseling agency for more information.

KEEPING YOUR HOME

Extended Tax Credits For Energy-Efficient Home Upgrades

Again thanks to the American Recovery and Reinvestment Act of 2009, you can earn tax credits during2009 and 2010 for installing qualified energy-efficienthome improvements on your principal residence including windows and doors, roofs, insulation, HVACsystems, water heaters, solar energy systems and windturbines. (Credits for such installations had expired at the end of 2008.)

In most cases, 30% of your total investment can berecouped, but the total tax credit claim for the improve-ments cannot exceed $1,500 (the old cap was $500).Systems and appliances must meet or exceed listed energyuse specifications and, in some cases, installation, sitepreparation and assembly costs may not qualify.

For an overview of credits available for selected homeimprovements, go online to www.EnergyStar.gov. Be sureto consult with a tax professional before purchasing toensure your upgrades qualify.

AppliancesThe Energy Efficient Appliance Rebate Program

provides $300 million to state governments to distribute toconsumers who purchase Energy Star-rated home appli-ances such as refrigerators, dishwashers, clothes washers,etc. Energy Star-rated appliances (look for the label) use10% to 50% less energy than standard models. Not onlycan you get a monetary rebate on your purchase, theseappliances help you reduce your utility bills. Again, seewww.EnergyStar.gov for more information.

Weatherization AssistanceLow-income homeowners are encouraged to make

energy-saving improvements to their homes by the U.S.Department of Energy's Weatherization AssistanceProgram (WAP).

If you qualify through one of the local weatherizationagencies that carry out the program in your area, an energyaudit will be conducted on your home. The audit willmeasure your home’s energy usage and recommend thebest energy-saving methods to employ, with weatheriza-tion services provided at an average value of $2,500 perhome. Improvements could include such things asincreased insulation, weather-stripping, new windows and doors, etc.

Over one million homeowners are expected to benefitnationwide, with an average family’s estimated savingsamounts projected to be about $350 per year in heating andcooling costs.

The WAP already has formulas in place for distributingthe stimulus bill’s funds (about $5 billion) to all 50 states.Services are provided by each state, and each state hasslightly different criteria to qualify. One of the primaryeligibility factors is income. To see if your family (or some-one you know) might qualify and to find out how to apply,visit www.TinyURL.com/aurbux.

SEE ING GREENNew Market, New Programs Have ImpactThe local housing market is picking up. Here are some area trends we

are watching that will create even more activity throughout 2009:4 First-time buyers are coming back (with low-down-payment

financing and payments less than rent).4 $8,000 first-time buyer tax credit with no payback required.4 Home sellers are making up for lower sales prices when they buy.4 Parents and grandparents are helping kids buy their first homes.4 Investors are picking up properties that create positive cash flow.4 Refinancings are putting more money into homeowners' pockets.

HUD-ApprovedHousingCounseling

The U.S. Departmentof Housing and UrbanDevelopment (HUD)advises, “Borrowersshould beware of anyorganization thatattempts to charge a feefor housing counseling ormodification of a delin-quent loan, especially if they require a fee inadvance.” To find a HUD-approved housing coun-seling agency, go onlineto www.TinyURL.com/dkbarb or call toll-free(800) 569-4287.

becomes due in full. (If thehome is sold, the balance isdue to the extent gain on thesale is sufficient.)

Both the $8,000 and $7,500credits are “refundable”—that is, if your tax bill for theyear is lower than the creditamount you qualify for, youwould receive the differenceas a tax refund.

The amount of the credit is limited to 10% of thepurchase price of the home,up to the applicable dollar-amount limits. Those who qualify can claim the credit on their federal income tax return.

The full credit is availableto married joint-filers (orequivalent filing status) withModified Adjusted GrossIncome (MAGI) up to$150,000, and to single filersand married filing separatelywith MAGI up to $75,000.The credit is phased out anddisappears completely forMAGIs above $170,000 (joint filers and equivalent) or $95,000 (others).

Please call us for moreinformation and to find out if you qualify for this greatlimited-time tax credit.