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Old 05-29-2009, 12:18 PM
 
Location: Great State of Texas
86,052 posts, read 84,162,817 times
Reputation: 27718

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They've changed their minds again..now you can get a short term loan and get that $8K right away.
The government want inventories to go down and I guess the credit on your taxes isn't moving housing quick enough.

Gov't allows short-term loans for tax credit - Yahoo! News (http://news.yahoo.com/s/ap/20090529/ap_on_bi_ge/us_housing_tax_credit_4 - broken link)
snippet:
"Thousands of first-time homebuyers will be able to get short-term loans so they can quickly make use of a new $8,000 tax credit that was designed to boost the battered U.S. housing market."
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Old 05-29-2009, 05:26 PM
 
220 posts, read 1,026,586 times
Reputation: 170
Quick use? for what? The catch is it has to be a FHA loan and it can't go toward the 3.5% down payment. It should be for everyone who wants/needs to put 20% down. oh well.
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Old 05-30-2009, 07:48 AM
 
406 posts, read 1,491,732 times
Reputation: 235
It irritates me to no end that the tax credit is only available to first-timers. Wouldn't it make sense to offer it to all homebuyers so people would have incentive to trade in their starter homes? Otherwise, what are all these first-time homebuyers going to buy, anyway?
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Old 05-30-2009, 11:03 AM
 
982 posts, read 1,094,166 times
Reputation: 249
Totally agree, RedPanda. It irks me when programs discriminate against anyone, rich or poor. All these programs are designed to help people who are in trouble or may get in trouble, whether their fault or not, and leaving out people who aren't. So in effect, they (we) see themselves (ourselves) as being punished for NOT being in trouble and it creates divisiveness and resentment and people not wanting to help others. If they'd just open it to everyone, we'd fix these problems a lot faster, IMO.
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Old 05-31-2009, 11:29 AM
 
5,458 posts, read 6,695,868 times
Reputation: 1814
Getting first time buyers into the market cuts down on inventory. Having someone move up takes one house off the market and adds another, so there's no net change to the number of empty houses sitting around collecting dust. It makes sense to target those buyers who are going to help the housing oversupply instead of wasting tax dollars getting people to move from one house to another.
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Old 05-31-2009, 12:30 PM
 
1,989 posts, read 4,451,508 times
Reputation: 1401
Quote:
Originally Posted by KCfromNC View Post
Getting first time buyers into the market cuts down on inventory. Having someone move up takes one house off the market and adds another, so there's no net change to the number of empty houses sitting around collecting dust. It makes sense to target those buyers who are going to help the housing oversupply instead of wasting tax dollars getting people to move from one house to another.
Strictly regarding first time buyers' effect on inventory and whether it makes sense to entice "move up" buyers:

In my area, the more expensive the property, the more months stale inventory is sitting around. The entry-level homes/foreclosures/shortsales are being snatched up by investors and a few actual families. So 9 months supply there. Homes north of $500k currently have 18 months supply. Upwards of $1 million, 27 months supply. Upward of $2 million, 48 month supply.

Nationally, the analysis I've been reading says there's a problem with a lack of move-up buyers (makes sense since they're selling underwater, riding out the bust or choosing to rent and wait), plus increasing prime mortgages foreclosing, a glut of McMansion inventory, and a looming Option-ARM situation that will effect upper end homes. All of this in a down economy where upper income folks are also getting pink slips or worried about them.

To get to the point (sorry, sleep deprived): I think the inventory problem isn't limited to low-end homes. And selling the low-end homes won't start a chain reaction of mid- and upper-end sales on the scale that it usually would.

Have no idea how anybody will solve this. Even an 8k incentive isn't much if you're looking at 10-15% further decline on a 500k+ home.
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Old 05-31-2009, 12:53 PM
 
975 posts, read 1,749,422 times
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This is just another ill conceived idea to artifically prop up the housing market instead of allowing the free market to run it's course. No doubt this will end up backfiring down the road the same way every other plan has.

20% downpayments worked very well for decades. This is plan is nothing more than gov't sponsored subprime mortgages and ultimately it's the financially sound who will end up footing the bill so that the financially inept can have a house for a little while.
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Old 05-31-2009, 02:11 PM
 
1,989 posts, read 4,451,508 times
Reputation: 1401
Quote:
Originally Posted by Traderx View Post
This is just another ill conceived idea to artifically prop up the housing market instead of allowing the free market to run it's course. No doubt this will end up backfiring down the road the same way every other plan has.

20% downpayments worked very well for decades. This is plan is nothing more than gov't sponsored subprime mortgages and ultimately it's the financially sound who will end up footing the bill so that the financially inept can have a house for a little while.
I hope you're not right, but I think you are.
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Old 05-31-2009, 05:36 PM
 
Location: Orlando, Florida
43,854 posts, read 50,914,692 times
Reputation: 58749
Maybe it's just me.....but wouldn't using government money to meet a down payment requirement end up putting people in the same 'I can't really afford this house' as many find themselves in now? I'm not against people getting the opportunity to purchase a home, but what a happens 5 years from now when a whole group of new home owners find themselves unable to meet their obligation?
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Old 05-31-2009, 06:04 PM
 
975 posts, read 1,749,422 times
Reputation: 524
Quote:
Originally Posted by GloryB View Post
Maybe it's just me.....but wouldn't using government money to meet a down payment requirement end up putting people in the same 'I can't really afford this house' as many find themselves in now? I'm not against people getting the opportunity to purchase a home, but what a happens 5 years from now when a whole group of new home owners find themselves unable to meet their obligation?
Bingo! We have a winner folks.

And add to that the fact that with so little down many will be underwater on the mortgage within 60 days.

31% of income going to the mortgage + very little skin in the game = disaster
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