Stimulus Package Explained by Local Mortgage Broker

By Jacob Barr, owner Ridgecrest Mortgage in Mt. Shasta

Tax Credit for Homebuyers
First-time homebuyers who purchase homes from the start of the year until the end of November 2009 may be eligible for the lower of an $8,000 or 10% of the value of the home tax credit. Remember a tax credit is very different than a tax deduction – a tax credit is equivalent to money in your hand, as opposed to a tax deduction which only reduces your taxable income.

The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000. Buyers will have to repay the credit if they sell their homes within three years.

Tax Credit Versus Tax Deduction

It’s important to remember that the $8,000 tax credit is just that… a tax credit. The benefit of a tax credit is that it’s a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if a homebuyer were to owe $8,000 in income taxes and would qualify for the $8,000 tax credit, they would owe nothing.

Better still, the tax credit is refundable, which means the homebuyer can receive a check for the credit if he or she has little income tax liability. For example, if a homebuyer is liable for $4,000 in income tax, he can offset that $4,000 with half of the tax credit… and still receive a check for the remaining $4,000!

Phaseout Examples

According to the plan, the tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000.

To break down what this phaseout means to homebuyers who are over those amounts, the National Association of Homebuilders (NAHB) offers the following examples:

Example 1: Assume that a married couple has a modified adjusted gross income of $160,000. The applicable phaseout to qualify for the tax credit is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time homebuyer tax credit that is available to this couple, multiply $8,000 by 0.5. The result is $4,000.

Example 2: Assume that an individual homebuyer has a modified adjusted gross income of $88,000. The buyer’s income exceeds $75,000 by $13,000. Dividing $13,000 by $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $8,000 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,800.

Remember, these are general examples. You should always consult your tax advisor for information relating to your specific circumstances.

Homes that Qualify

The tax credit is applicable to any home that will be used as a principle residence. Based on that guideline, qualifying homes include single-family detached homes, as well as attached homes such as townhouses and condominiums. In addition, manufactured or homes and houseboats used for principle residence also qualify.


Higher Loan Amounts

More good news – there is an extension on the additional tier of conforming loan amounts which had been first established in 2008. This tier of home loans are those greater than $417,000, and with a maximum that depends on the area, but is not greater than $729,750. These loans will again be eligible for rates that are slightly higher than conforming loan rates, but less expensive than the standard “jumbo” loan rates.

Additional Housing-Related Provisions

Tax Incentives to Spur Energy Savings and Green Jobs — This provision is designed to help promote energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation.

Landmark Energy Savings — This provision provides $5 Billion for energy efficient improvements for more than one million modest-income homes through weatherization. According to some estimates, this can help modest-income families save an average of $350 a year on heating and air conditioning bills.

Repairing Public Housing and Making Key Energy Efficiency Retrofits To HUD-Assisted Housing—This provision provides a total of $6.3 Billion for increasing energy efficiency in federally supported housing programs.Specifically, it establishes a new program to upgrade HUD-sponsored low-income housing (for elderly, disabled, and Section 8) to increase energy efficiency, including new insulation, windows, and frames.

Expanding Housing Assistance—This provision increases support for several critical housing programs. It includes $2 Billion for the Neighborhood Stabilization Program to help communities purchase and rehabilitate foreclosed, vacant properties.

More Help for Homeowners in the Future
Another thing to keep an eye on in the coming weeks is President Obama’s plan to help struggling borrowers before they are faced with a default on their mortgage.

According to reports, the Obama administration is discussing plans to help borrowers who are struggling to stay afloat, but who have not yet fallen behind on their payments. At this point, details are scarce; however, reports indicate that President Obama is looking to spend approximately $50 Billion to directly help homeowners before they face foreclosure and financial disaster.

While this is good news for individual homeowners, it will likely be good for the housing industry as a whole. That’s because, assisting struggling borrowers before they default should help stop the wave of foreclosures, which are estimated to top two million this year. That, in turn, will help stabilize home prices.

The Economic Stimulus Plan is huge, and impacts a number of industries. I’ve highlighted some of the major provisions that may impact you now and in the future.

CC&R Corner for March 2009

STATUS ON AMENDMENTS TO THE CC&R’S

By Will Bullington, Lake Shastina Compliance Officer

There seems to be some confusion about the ballot that was mailed to members by the Board. Between town hall meetings, complaints from homeowners and variance requests three sections of the CC&Rs were identified as needing some type of change. To make these changes it requires 51% of the association members to vote through a secret ballot. This is approximately 1,600 members. We have received around 1,000 with over 3,300 being mailed out. That’s not a bad return but more people need to exercise their right as members of the LSPOA and vote. The Board authorized a re-mailing of ballot to those that did not respond at all. Those ballots will be mailed out in mid March. What is the vote about?

Let’s say you go to a home improvement store and buy a pre-fabricated shed or dog kennel. If the eaves on the shed are not at least 18” or the height of the dog kennel is 5 foot or below, it violates the CC&Rs. If you want to put in a small garden area with fencing to keep out the deer, it can’t exceed 5 feet in height. Do you think that with over 1,000 homes we have had a few “controversies” with these sections? You bet we have.

If you have a ballot and haven’t taken the time to vote please do so. If you are content with the way the CC&Rs are currently written then vote “against” the amendments. If you want to see some type of change then the ballot will let you vote “for” or “against” each section. There are three sections being considered for amendments: eaves or overhangs (the section is currently vague as to where one measures to or how), outbuildings, and fences.

What type of architectural rules would there be? You will be given written notice 30 days prior to the Board having a hearing on each rule (or any rule for that matter). You have a right to give input to the Board as to what the rules should be. Current input includes making some type of allowance for dog runs and garden enclosures to exceed the 5 foot rule but still be “open.” Other input included allowing smaller outbuildings and sheds to have 12” eaves and not meet the primary structure requirement of a 4 ½ to 12 pitch, etc.

If you never received or lost your secret ballot please call our office at 938-3281 extension #107 and ask for a new one to be mailed to you. Please VOTE!

A Lake Shastina Milestone, sort of

For the first time since we began real estate here I saw a home listed for under $100,000 (above, on Cottontail Dr.). As you might suspect it needs work and is dated. It is also I think, an REO or real estate owned. That is, the bank owns it because the owner gave it back to them under duress.

There are a rising number of these it seems. As many Siskiyou County natives say, it takes months for some things to reach us up here. Like the foreclosure waves rippling through the bay area for example. This week we met with a Redding broker looking for help with the REO's and foreclosures here. He has so many, and spread so far out, that he doesn't have time to drive up and show or take pictures.

Prices per square foot are below $100 more commonly, too. It used to be that $100 per foot was the builder's cost and in olden times homes were selling at $125 or even $145, where the builder could make a decent profit. Of course older homes should be less per foot than brand new ones; they have wear and tear, often need updating, and lack modern amenities.

The home above is $63 per square foot and owned by Countrywide, one of the first casualties of the ARM loan collapse. The bank is trying to get back what they loaned the owner and it's possible they may have to take a loss on that loan if they can't move the home for the actual balance.

I'm not trying to alarm anyone however. We have all seen home values falling and in extreme cases, owners walking away from their places. Buyers do seem scarce and wary; what if I buy and prices go even lower? Some who have been in the business through previous cycles feel that we are not yet at the turning point where demand has risen close enough to supply for prices to stabilize. Maybe that will happen this year and the certainty about it all is that it WILL happen. Cycles by definition repeat themselves and the supply-demand balance will return sooner than later we feel. Our phones are ringing more lately it seems and we are hopeful.

San Francisco...Our West Coast Gem

Please forgive me if you are from Los Angeles but we just returned from yet another enchanted visit to our favorite city, San Francisco. The photo of two ships crossing under the 'Gate was taken from Fort Baker on the northern end of the bridge and the fort is just one of a thousand attractions in this west coast cosmopolitan city.

We picked a sunny weather window with mild temps and focused on linking up with our grandkids at the California Academy of Sciences in Golden Gate Park so it was an A+ trip all around.

First of all we didn't drive around The City. We stayed in the Marina District ($79 at the Cow Hollow Motor Inn with free parking) and took the bus to the Academy. Good thing too, parking was really scarce there. The bus fare was 50 cents and it took about :15 from the motel.

The Academy is a must-see; a recent major remodel of the original and a fantastic job. Aquarium, natural history museum, planetarium, and the big attration . . . a green roof. Planted with native plants that need little water it is an achievement not to mention the edge of the wave. Several urban skyscrapers are adapting the idea.

The same #28 bus also stops at the bridge and we walked about halfway across, just missing the crews ratcheting up the suspension cables to paint them. A container ship was passing below as we marveled.
Yes, the City lives at night. We consistently qualified for the Early Bird Special dinners because we ate before 8PM. The City is just coming awake at that hour. Dinner for us is 7-ish when we are home but that is not the rule with the Beautiful People in this city. Eight PM is when you might ARRIVE at the designated restaurant but you EAT much, much later. San Francisco is a night-life city, far beyond Sally and my means to enjoy.

Not only are the women all young and gorgeous and the men young and hunky but it seemed like every single car was a BMW, Porsche, Saab, or Jaguar. I'm sure I missed the Hyundai's like ours but well, I haven't seen a Bentley in Siskiyou County for a long time so those I did see in SF were a treat.

Did I mention we had East Coast pizza with our grandkids at their favorite pizzeria? There was an Amici's next to the motel that did this kind too, thin crust with the home-baked aroma. Wish we had one here.

Too much to tell, I'll do another installment on myshastina.com. Stay tuned.

Soaking Dishes, The Responsible Environmental Response to Global Warming

There is a science to washing dishes as most husbands already know. For example, scrubbing is hard and wasteful work. All work is wasteful, actually. Many tasty sauces and marinades become ugly challenges if left overnight, requiring needless expenditures of energy, water, and Comet. Not to mention the ugly recriminations the next day.

To meet this challenge I have developed The Soaking Formula. It is quite simple really, one just needs to exercise patience. All pans, I repeat, ALL pans must soak overnight in order to conserve water and labor. I have found for example, that when my bride poaches eggs in milk the saucepan becomes encrusted with burned milk. Burned milk is like concrete as we all know.

There is no cure for this although I do employ the most effective pre-wash known to man . . . our pet dogs. They pre-clean this stubborn accretation to the point that, after application of my patented 24 hour soaking formula, all I have to do is say "Oops, was there a pan in the sink?".

Snow Job

(Editor's Note: This is my adaptation of a joke I got in an email. It's like the anonymous sign in the auto parts store "The beatings will stop when morale improves" or the anti-stress poster "Beat your head here until you don't feel any more stress".I have no idea who started it but I have replaced some of the expletives for the sake of propriety.)

We always have loved the mountains. We lived in southern California for so long and are so tired of the traffic, the crime, the . . . well, you know.

So when I finally retired and the kids were all gone we sold out and moved to the High Sierra where they have four REAL seasons as opposed to our one (smog).

The first winter storm was just gorgeous. Magnificent white flakes (no one is the same, did you know that?) fluttered down from the night sky to embrace our home with a sugary coating. It was easy to shovel the driveway, too. The neighbor said it was a "dry snow", whatever that means.

Oh, now it's Thanksgiving and I've got some REAL shoveling to do. Ha ha ! It's a little heavy though, the storm was a little more "serious" according to Fred but hey, this is what we wanted, to get back in touch with Mother Nature, right?

A little sore this morning, but nothing a session in the hot tub can't cure. Power is out though, so I'll hope the tub works tomorrow.

Wow, I can hardly see the hot tub now, this last storm really clobbered us! But this is why we moved here: snow up to the fence-tops, that's Mother Nature at work!

Broke the shovel today, need to go buy another but can't get out of the driveway.

The snowplow piled a mountain DIRECTLY in front of my driveway! Can you believe this guy!?! And to beat that, it's frozen now. Solid ice. Still don't have a new shovel.

Okay, I get it. You need to know the home phone number of the plow driver and probably threaten his children. How come the schools get plowed out and I don't, hmmmm? He might be Mafia or maybe related to that jerk I fired a couple of years ago.

The little woman is getting testy. Splitting and hauling wood to cook on our Decorator Wood Stove was not in our plan but with my injured back what does she expect???

I'm really freaking tired of this. That bloody plowman is on my list now. Every time my snowblower (with electric start but the power is still out) breaks down HERE HE COMES AGAIN !! HE KNOWS I HATE HIM. He KNOWS that I put the garbage cans right where he can KNOCK THEM OVER. Hah! I am going to find out where he lives and sic Guido on him !!!

Power has been off for three days now and we are living on cans of Chef Boyardee and beginning to enjoy it. My lower back is now in the 'don't even talk to me' stage and the wife is threatening to go back to southern California where she says the sun is still shining.

Alright. I'm not going to deal with this neanderthal plow guy any more. If I see him I'll shoot his #*@!? little truck right in the gas tank. The wife and I have separated and my letters to the editor are going nowhere.

They wrapped me in this funny suit today just because I was running up the street and I forgot to get dressed first. It's a Scandanavian thing but they claim I torched the house on purpose. They just don't understand . . . . it’s because I just don’t want to shovel anymore!

Watching for Katie

We own three rescue shelties as many of you already know. Rescue means they were given up by their owners for whatever reason and are in effect, in the pound so not only is this the only way we could afford one but it gives you that warm fuzzy feeling you get when you take an animal home from the shelter.

Oliver for example was a trade for fixing somebody's rototiller because he was too tall to show which is what his owner wanted and she couldn't afford the repair. Andrew was dumped by some vile breeder on a logging road outside Hilt with no collar or tags and loaded with ticks and burrs. His only 'fault' was he was a little fat.

And Tiffany is well, skitzy . . beautiful but emotionally challenged. She would not show well either but for behavior reasons.

Anyway, we walk them through the neighborhood regularly and we are both facinated at their ability, all three of them, to remember where each neighbor dog is. For instance, a neighbor up the street has a gorgeous Irish Setter named Katie. She is usually on a lead by his garage, lounging and watching the passers-by with her toys at hand.

But Ollie thinks she's fearsome. For yards before we reach the house he's pulling and 'yapping' (in quotes because he's de-barked). Also, she's 'there' even if she's not. Most times in other words, the garage is closed and she's gone with her owner somewhere. But Ollie doesn't buy this. She is there SOMEWHERE and he just KNOWS it. He anticipates that she is there / not-there fifty yards away and point his gaze directly at the garage, hoping perhaps that his intuition has not disappointed him. This is a lot like 'eyes left!' in the miltary.

He did (and continues to pull even now) the same thing at Ed Dallara's house on Hogan. Ed, who passed away some months ago, used to cruise the neighborhood with his walker giving out treats to all the dogs he met. If Ed saw us coming he'd open his garage to come out with the biscuits. He had many doggie friends who are very disappointed at his passing and Ollie is just one of them.

Ollie never forgot this man. Or his home. Or the biscuits. We still come to a tugging halt when we walk by his place, even though the garage is closed now.

The thing is THEY REMEMBER. Places where they were, places where nice people were. Why am I not surprised at this?