New Info On Expanded $10,000 California Home Buyer Tax Credit – Perfect To Use When You Get a VA Loan

Here are some updates to an earlier post I made on the newly extended California home buyer tax credit. That post did not have all the details but this should have more.

Starting May 1st, the state of CA will award $200 million in state income tax credits to home buyers. Here are some details of the credit:

Worth up to $10,000 spread over 3 years
Credit is available to anyone who buys a newly built home and first time buyers who buy and existing home or newly built home
To get the full $10,000 credit over three years, a home buyer must owe at least $3,333 in state taxes each year
A first-time buyer is defined as an individual, or an individual’s spouse, who had no ownership interest in a principal residence for three years before the date of purchase
The home must be used at your principle residence for at least 2 years
The credit is worth 5% of the purchase price or $10,000, whatever is less. So if you bought a home for $100,000, you would only get at $5,000 tax credit. But if you bought a house for $200,000 and over you would get the full $10,000 tax credit.
Buyers of existing homes must close on the house between May 1st 2010 and Dec 31st 2010
Buyers of new homes must enter into contract between May 1st 2010 and Dec 31st 2010, but have until Aug 2011 to close
Last year the tax credits were on a first come first served basis. This year the Franchise Tax Board existing home credits will run out by June 30th (so you need to move fast!!!). Once all the credits are allocated, the program will end.
The California credit goes into effect the day after the federal tax credit is set to expire

In 2009, the state of California approved $100 million in state tax credits for people who bought a newly built home starting March 1, 2009. Last year’s credit was also worth up to $10,000 spread over three years but was good ONLY for brand new homes, not existing homes. The credits, which were allocated on a first come, first served basis, ran out in less than four months, and the Franchise Tax Board stopped awarding them July 2. So the moral of the story is you need to really buy between May and July and file for your credit really fast to make sure you get it.

The summary is you will pay $10,000 less in state taxes over the next three years if you fit into this program.

A reminder on some excellent advantages of VA lending:

Maximum VA loans and jumbo VA loan up to $962,500 in the San Francisco Bay Area Counties, $593,750 Los Angeles, $437,500 San Diego, $593,750 Orange County (feel free to call for your county limit)
VA loan credit score can be as low as 600 for 100% financing, you don’t need perfect credit
VA loan interest rates for 30 year fixed loans STILL at historic lows
VA lending has the most generous debt-to-income ratios – VA loans can allow upwards of 55% ratios where conventional with <20% down is 41% with min 720 credit
Second VA loan (and third, fourth, etc…) available if you have paid off your first VA loan
100% financing on VA loans and the seller can pay all your closing costs, so you can buy with almost zero out of pocket

Give me a call (858-922-7899) or email (homeloan8@gmail.com) if you have any questions or want to apply for a VA loan.

Warmest Regards,

Rob Chomentowski

Sr. Loan Officer (and VA specialist)

858-922-7899

homeloan8@gmail.com