Delaware State Housing Authority. Delaware First-Time Homebuyer Tax Credit

Transcription

1 Delaware State Husing Authrity Delaware First-Time Hmebuyer Tax Credit

2 The Delaware First-Time Hmebuyer Tax Credit Team Delaware State Husing Authrity (DSHA) has partnered with Hilltp Securities, Inc. t supprt lenders, realtrs, and hmebuyers t market, educate, and administer DSHA s Delaware First Time Hmebuyer Tax Credit. DSHA will prvide: Lender Training Delaware First Time Hmebuyer Tax Credit Marketing Delaware First Time Hmebuyer Tax Credit Prcessing Hilltp Securities, Inc. will prvide: Delaware First Time Hmebuyer Tax Credit Issuance t Hmebuyer General Reprting IRS Annual Lender Reprts Hmebuyer Annual Letter 2

3 DE Tax Credit Prgram Incme Limits Cunty Area 1 2 Persn Husehlds 3+ Persn Husehlds New Castle $81,100 $93,265 Targeted $97,320 $113,540 Kent & Sussex $74,400 $85,560 Targeted $89,280 $104,160 Incme limits in effect as f 3/25/15 and are subject t change. Incme Limits: Mrtgagr s husehld incme must nt exceed the prgram limits. 3

4 DE Tax Credit Prgram Purchase Price Limits Cunty Kent New Castle Sussex Prperty Type f Hme Census Tract 1 Unit 2 Units 3 Units 4 Units Nn Targeted $265,158 $339,456 $410,307 $509,918 Targeted N/A N/A N/A N/A Nn Targeted $371,250 $475,238 $574,483 $713,934 Targeted $435,750 $580,847 $702,146 $872,587 Nn Targeted $309,375 $396,048 $478,711 $594,929 Targeted $378,125 $464,059 $585,092 $727,136 Purchase price limits in effect as f 3/10/15 and are subject t change. Incme Limits: Mrtgagr s purchase price must nt exceed the prgram limits. 4

5 What is a Delaware First-Time Hmebuyer Tax Credit and What are the Benefits? A Delaware First Time Hmebuyer Tax Credit is a federal incme tax credit designed t assist peple t better affrd individual wnership f husing. The Delaware First Time Hmebuyer Tax Credit prvides an annual tax credit up t $2,000 t qualifying hmebuyers fr the riginal term f their mrtgage, as lng as they live in the prperty and have a mrtgage. The annual credit is calculated by taking the annual mrtgage interest paid multiplied by the Delaware First Time Hmebuyer Tax Credit rate f 35% which has been established by DSHA. The tax credit is applied t the federal incme tax liability f the Delaware First Time Hmebuyer Tax Credit certificate hlder. There must be a tax liability t claim the credit. Delaware First Time Hmebuyer Tax Credit calculatin example t fllw.

6 What is a Delaware First-Time Hmebuyer Tax Credit & BENEFIT Delaware First Time Hmebuyer Tax Credit Example Hme Lan Amunt $150, Sample Annual Interest Rate (30 year, fixed) 4.75% Apprx. Ttal Mrtgage Interest Paid (Year One) $7, Delaware First Time Hmebuyer Tax Credit Rate 35% Annual Tax Credit Amunt (Line 3 x Line 4) $2, (Tax Credit is Limited t $2,000/year max) Mnthly Credit Amunt ($2, / 12) $ Remaining itemized Mrtgage Interest Deductin: $7, $2, = $5, A Delaware First Time Hmebuyer Tax Credit is a true tax credit, reducing the amunt f the credit frm their ttal federal incme tax liability, receiving a dllar fr dllar savings. A tax deductin is subtracted frm the adjusted grss incme befre federal incme taxes are cmputed. Only a percentage f the amunt deducted is realized in savings. A brrwer in the 15% tax bracket will nly save $.15 in taxes fr each dllar f mrtgage interest paid.

7 Example f Actual IRS Frm 1040 (page 2)

8 Hw a Hmebuyer Uses The Delaware First-Time Hmebuyer Tax Credit Actual Example based n prir scenari. Adjusted Grss Incme $42, Withhldings & Tax Payments $6, Tax Liability $4, Refund $2, Tax Credit (up t $2,000) $1, Revised Tax Refund $4, Brrwer may als itemize remaining $5, f mrtgage interest paid. DSHA encurages hmebuyers t cntact their tax advisr r emplyer t help them with the necessary tax frms and, if they s chse, t prperly adjust their tax withhlding.

9 What is a Delaware First-Time Hmebuyer Tax Credit and What are the Benefits? The annual maximum $2,000 tax credit may be used by a lender t assist the hmebuyer in qualifying fr a mrtgage lan, fllwing agency underwriting guidelines: Nte: DSHA will include all incme that appears n the 1003 when determining ttal husehld incme. The Delaware First Time Hmebuyer Tax Credit has the ptential f saving the hmebuyer thusands f dllars ver the life f the lan.

10 Hw a Hmebuyer Uses The Delaware First-Time Hmebuyer Tax Credit Brrwer claims the credit with their annual federal incme tax return using IRS Frm The credit may be claimed fr the riginal term f the lan as lng as the hme is their principal residence. The brrwer must have tax liability t benefit frm the annual credit in any given year. The brrwers may, if they chse, adjust their W 4s t reflect the anticipated credit. If the amunt f the Delaware First Time Hmebuyer Tax Credit credit exceeds the Delaware First Time Hmebuyer Tax Credit hlder s tax liability, reduced by any ther persnal credits fr the tax year, the unused prtin f the credit can be carried frward t the next three tax years r until used, whichever cmes first. The hmebuyer will have t keep track f the unused credit each year. The current year credit is applied first and then the ldest amunt f unused credit applied next. DSHA encurages hmebuyers t cntact their tax advisr r emplyer t help them with the necessary tax frms and, if they s chse, t prperly adjust their tax withhlding.

11 Basic Delaware First-Time Hmebuyer Tax Credit Requirements If using a DSHA Welcme Hme lan, the rate, term, f the first mrtgage lan is determined by first mrtgage prduct and whether r nt the brrwer is using DSHA dwnpayment and clsing cst assistance. Fr lenders nt using a DSHA Welcme Hme lan, the rate, term, and type f mrtgage lan is determined by the lender. Only first mrtgages qualify fr the Delaware First Time Hmebuyer Tax Credit Prgram. Delaware First Time Hmebuyer Tax Credit may be used with all DSHA s prducts, including Secnd Mrtgage Assistance Lan (SMAL) and Welcme Hme Advantage 3.

12 Delaware First-Time Hmebuyer Tax Credit Eligibility Requirements Simply put, any hmebuyer eligible fr a Welcme Hme lan whse incme and purchase price des nt exceed the Tax Credit limits will qualify fr the Delaware First Time Hmebuyer Tax Credit. Everyne wh signs the Mrtgage must sign the affidavits.

13 Step 1 Delaware First-Time Hmebuyer Tax Credit Prcess Reserve Delaware First Time Hmebuyer Tax Credit Funds via the MITAS nline reservatin system.

14 Cmplete MITAS Reservatin

15 Delaware First-Time Hmebuyer Tax Credit Prcess Lenders will submit the Delaware First Time Hmebuyer Tax Credit Cmpliance Review Package via electrnic uplad thrugh the Mitas reservatin system. If using a DSHA 1 st Mrtgage, DSHA will use the uplad n the primary mrtgage. If requesting a Stand Alne tax credit, the Cmpliance Review Package will need t be upladed t that recrd in Mitas. DSHA will review fr eligibility. If the brrwer is eligible, the Reservatin will be mved t a Cmmitted status and DSHA will issue the fllwing: Delaware First Time Hmebuyer Tax Credit Apprval Letter Delaware First Time Hmebuyer Tax Credit Clsing Package Checklist (example t fllw) Delaware First Time Hmebuyer Tax Credit Clsing Affidavit Submissins that are incmplete r cntain errrs will be mved t status f Pending Cnditins Psted. Lender must review and submit items requested within 10 days r the reservatin will be cancelled.

16 Fees and Csts The fees cllected at clsing are: $350 fr Delaware First Time Hmebuyer Tax Credit Applicatin/Clsing Package Review 1% f the ttal lan amunt. (The 1% fee will be waived fr brrwers using a DSHA Welcme Hme lan.) Fees can be paid by the buyer, seller, etc., as allwed by FHA, VA, USDA, cnventinal and/r investr guidelines.

17 Delaware First-Time Hmebuyer Tax Credit Prcess The lender clses the lan. After clsing, send Hilltp Securities, Inc. all f the required items listed n the Hilltp Securities clsing package checklist alng with applicable fees. Original dcuments are nt required. Hilltp Securities will review the clsing package dcuments and if cmplete, issue the certificate t the buyer.

18 Delaware First-Time Hmebuyer Tax Credit Servicing In January f the fllwing year, lender submits IRS frm 8329 fr all Delaware First Time Hmebuyer Tax Credits issued in the prir calendar year. Hilltp Securities will cmplete the frm and frward t each lender fr filing. It is the respnsibility f the lender t review the reprt fr accuracy prir t filing. Als in January, Hilltp Securities will send hmebuyers receiving a Delaware First Time Hmebuyer Tax Credit in the prir tax year a reminder letter and infrmatin n hw t file. Hmebuyers wh refinance their first mrtgage lan can cntinue t claim the tax credit by cntacting Hilltp Securities and requesting reissuance f the certificate.

19 Delaware First-Time Hmebuyer Tax Credit Certificate

20 Summary There are tw Main Benefits t the Hmebuyer: 1. Prvides a federal tax credit up t $2,000 a year fr up t 30 years as lng as the hmebuyer ccupies the hme and has a mrtgage. 2. Can help qualify the hmebuyer which results in increased buyer capacity t qualify fr the mrtgage lan.

21 DSHA Originatins Cntacts Telephne: Fax: Gary Hecker Husing Finance Manager Lender Supprt Lrena Testardi Husing Mrtgage Lan Officer II Cmpliance Review/ Lender Supprt Lisa McClskey Husing Mrtgage Finance Officer II Cmpliance Review/ Lender Supprt Karen Flwers Office Manager Initial Package Review- Pending Cnditins

22 Hilltp Securities, Inc. Cntact Infrmatin General Address: Mailing Address: Cntact: Hilltp Securities, Inc Elm Street, Suite 3500 Dallas, Texas Lri Wd Additinal services available frm Hilltp Securities: Realtr, Lender, Builder and Outreach, Educatin and Training Present at First Time Hmebuyer Seminars Marketing Materials