2009 Housing Stimulus -- Three Separate Jolts:

Tax Credit            Underwater Refi           Modifications

     These are the first sensible efforts since the FHA began the Streamline Refi in 1987:

1. Tax Credit is a very good deal:
            -- Unlike last year, you keep it, no payback in future years
            -- Lesser of $8,000 or 10% of purchase price; around here means
                $8,000 for every purchase
            -- “First time” = not an owner in prior 3 years.
            -- Income limit: $75,000 single, $150,000 family, based on MAGI
                (which adds back IRA contributions and some other stuff).
                CHECK! Check whole eligibility with CPA!!
            -- C0-SIGNERS DO work, even if parent owns a home. Income limit
                not yet clear, assume $150,000 for combined occupant/co-signer
            -- BEST: If buy in 2009, can claim on 2008 return, get credit now!!
            -- 2nd BEST: Excess credit is refunded. If tax bill was only $2,000,
                IRS will send you a refund of $6,000

2. Underwater Refinance
            -- Full details March 4
            -- Loans ONLY between 81% and 105% LTV (>80% = market refi)
            -- Existing Piggyback requires subordinaton; total show-stopper
            -- ONLY Fannie/Freddie loans, many conforming amounts excluded:
                very few subprime, Alt-A, Option ARM are eleigible
            -- Primary residence
            -- Apply with current servicer, not market lenders
            -- Must qualify by income, no “stated”
            -- No new PMI, old (if any) rolls over.
            -- Normal closing costs, market rates

3. Modifications
            -- Concept: help at-risk households
            -- DETAILS HAZY, full program due March 4
            -- To be eligible, must have debt-to-income ratio above 31%
            -- NOT necessarily in default
            -- 1st can be modified WITHOUT Piggyback subordination
            -- Primary residence
            -- LTV does not matter, must be conforming amount
            -- No cost        
            -- Executed by current servicer    

     Programs 2 & 3 will totally overwhelm servicers and frustrate applicants, but we have to start somewhere....