**President signs federal tax credit extension **

President Obama on Friday, Nov. 6 signed a bill extending and expanding the Federal Tax Credit for Home Buyers. The bill passed the U.S. House of Representatives yesterday and the U.S. Senate late Wednesday.

The tax credit will be extended through April 30, 2010, with a 60-day extension if a binding contract is in place prior to the deadline. First-time home buyers will continue to receive a tax credit of up to $8,000, while existing homeowners will receive a reduced credit of up to $6,500. Existing homeowners will be eligible for the $6,500 if they have lived in their current residences for at least five years. The bill also will increase the qualifying income limits from $75,000 for single tax filers and $150,000 for joint filers, to $125,000 and $225,000, respectively. The purchase price of the home is capped at $800,000.

Under additional provisions in the bill, taxpayers can claim the credit on purchases completed in 2010 on their 2009 income tax returns. The bill maintains the provision that home buyers do not have to repay the credit provided the home remains their primary residence for 36 months after purchase, and waives this requirement for active duty military personnel who move due to a military order.

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*Update! *
Independent Contractor Withholding Proposal NOT in Budget!!
Big Win for REALTORS®!
 
The governor and legislative leaders have reached agreement to bridge the $26.3 billion state budget gap.  According to legislative sources and newspaper accounts, the agreement does NOT include the 3 percent independent contractor withholding proposal. However the official budget language is not yet in print. C.A.R. will follow up with additional details when they are available.  The agreement includes about $15 billion in state budget cuts, as well as $2 billion in cuts to, and another $2 billion in borrowing from, local governments.  A vote on the budget in both houses is planned on Thursday and it is expected that the agreement will receive the votes needed to pass.

Thank You to Everyone Who Called Their Legislators!

In the last few weeks, over 8,000 REALTORS® called their legislators using C.A.R.'s mobilization hotline to oppose this proposal. Countless others emailed, wrote, faxed or called their legislators directly. Your actions sent a clear message to our elected officials: even when the odds are stacked against us, C.A.R. will not give up quietly, but will continue to fight.

*House passes American Clean Energy and Security Act climate bill*

On June 26, the U.S. House of Representatives passed the American Clean Energy and Security Act by a vote of 219 to 212.  While the bill addresses many issues, ranging from industry emissions, alternative energy sources, and ending U.S. dependence on foreign oil, C.A.R. and NAR focused its attention on the real-estate related provisions of the 1,300-page bill.

In a victory for REALTORS®, the House of Representatives removed a costly energy-efficiency labeling program for existing properties and will limit energy labeling to new construction only.  The legislation also includes financial incentives for property owners who choose to retrofit and modify their properties to make them more energy efficient.  These may include financial incentives, such as loans and grants, to be handled by the states.  The legislation also will prohibit the Environmental Protection Agency from regulating carbon emissions from residential and commercial buildings under the Clean Air Act.  Lastly, the bill would create energy targets for building codes.  States would be able to set their codes above what is required by the legislation; California’s building codes appear to be in compliance with the bill’s targets.

The issue of climate change now moves to the Senate, though it is unclear if the Senate will be able to address the issue prior to its August recess. 

Click here for printout

*C.A.R. launches Mortgage Protection Plan for first-time home buyers*

The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.)launched the C.A.R. Housing Affordability Fund Mortgage Protection Program (C.A.R.H.A.F. MPP) for first-time home buyers.

Through the Housing Affordability Fund Mortgage Protection Program, first-time home buyers who lose their jobs due to layoffs may be eligible to receive up to $1,500 per month, for six months, to help make their mortgage payments. A qualified co-buyer also can participate in the program, and receive a monthly benefit of $750 per month for up to six months.  Program benefits also include coverage for accidental disability and a $10,000 death benefit.

C.A.R.’s Housing Affordability Fund is dedicating $1 million toward its Mortgage Protection Program, and estimates that as many as 3,000 families will benefit from the program this year.

To apply for the program, home buyers must request an application for the H.A.F. Mortgage Protection Program from their REALTOR®.

Click Here to see the qualifications

1. Fact Sheet about the Homeowner Affordability and Stability Plan
2. Support Under the Homeowner Affordability and Stability Plan: Three Cases 
3. Q&A for Borrowers about the Homeowner Affordability and Stability Plan

*New FHA Loan Limits Realeased*
As a result of the passage of the American Recovery and Reinvestment Act of
2009, today HUD published changes to FHA's single family loan limits . Given
that most of the loan limits decreased for 2009, most areas will revert to the
higher 2008 mortgage limit.

For 2009, the maximum mortgage limit for an area is the higher of the limit
that was in effect for 2008 or the current 2009 limit as stated in Mortgagee
Letter 2009-07. The new loan limits, which are effective for any loan closed
in calendar year 2009, are in effect through December 31, 2009.
Please note that because the new limits are a comparison of 2008 and 2009 there
is not a process for appealing the limits. You can find the FHA loan limit for
your area at https://entp.hud.gov/idapp/html/hicostlook.cfm.

To view the mortgagee letter online, please visit
http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/.

To view current FHA Loan Limits for your area go to
https://entp.hud.gov/idapp/html/hicostlook.cfm

*HOUSING STIMULUS LAW UPDATE*

C.A.R.'s Legal Department has released a new legal article, Housing Stimulus Laws for 2009, to help REALTORS® understand the recent laws enacted by federal and California lawmakers.  This legal article addresses the $787 billion economic stimulus bill, the federal Making Home Affordable Program, and new California housing stimulus laws.

Here are some of the highlights of C.A.R.’s Housing Stimulus Laws for 2009:

• Eligibility requirements for the $8,000 first-time homebuyer tax credit.
  
• Updated contact information for determining whether a borrower has a Fannie Mae or Freddie Mac loan.  This contact information is also pertinent because lenders are generally prohibited from reducing real estate commissions for Fannie Mae short sales (see Realegal 2/27/09).
  
• Details of the $275 billion Making Home Affordable Program, which includes refinances up to 105% of current value and government subsidized loan modifications.
  
• Monetary incentives of $500 for participating loan servicers and $1,500 for borrowers for doing short sales under the Making Home Affordable Program (see Question 57).
  
• Guidelines for the $10,000 new home tax credit under California law.
  
• Explanation of the new 90-day extension to the foreclosure process for lenders without comprehensive loan modification programs.