The Georgia Dream NSP Purchase Program was created to encourage the purchase of foreclosed properties. Funds utilized are an allocation of federal dollars received by the Department of Community Affairs from the Housing and Economic Recovery Act of 2008.

The program provides $14,000 to eligible borrowers purchasing foreclosed properties in eligible areas. Funds are disbursed in the form of a second mortgage lien with no interest and no monthly payments. The lien is released over a period of five years and six months. Funds may be used for required repairs and/or down payment assistance.

This program begins April 1, 2009 and all funds must be disbursed by June 30, 2010.

How do I apply?

• All buyers must receive eight hours of in-person home buyer education/counseling provided by a HUD-approved housing counseling agency.
  
• Contact a Georgia Dream participating lender for pre-qualification and to begin the mortgage loan process. The lender will evaluate your credit worthiness based on FHA or VA guidelines and your qualifications for the program based on the Georgia Dream NSP Down Payment Program guidelines.

Frequently Asked Questions:

1. How do I locate a Georgia Dream participating lender?
   Click here and choose your area of the state for a list

    

2. How do I locate a HUD approved Home Buyer Education provider?
   Click here for a list

    

3. May I take home buyer education online?
   No. This program requires attendance at a home buyer seminar or face to face counseling.

    

4. Can I buy a home anywhere in Georgia?
   No. You must purchase a foreclosed property in an area of greatest need. Need was determined by the volume of foreclosed properties in a county. Click here to view the map of eligible counties.

    

5. Are there income limits?
   Yes. Eligible borrowers must have a total household income less than 120% of the area median income. Click here for the maximum income limit in each of the eligible counties.

    

6. Are only first time home buyers eligible for the Georgia Dream NSP program?
   Applicants do not have to be first-time home buyers and they are not prohibited from owning other residential real estate. However, the applicant must occupy the NSP financed property as his or her primary residence within 60 days of closing. Any rental income generated from the ownership of other residential real estate would have to be counted as household income for NSP qualification purposes.

    

7. If I am a first time home buyer and I use the Georgia Dream NSP program do I still qualify for the federal first time home buyer $8000 tax credit?
   Yes. If you purchase a home prior to December 1, 2009. Consult your income tax preparer or the IRS. www.irs.gov

    

8. I would like to use the $8000 federal tax credit as part of my down payment. Can DCA include this amount in my mortgage loan?
   No. DCA does not have a mechanism in place to monetize the federal first time home buyer tax credit for use as a down payment.

    

9. Can I use other down payment funds in conjunction with this program?
   No. Unlike the traditional Georgia Dream down payment programs, the Georgia Dream NSP program cannot be combined with other down payment assistance programs.

    

10. What interest rate will I pay on my first mortgage loan?
    The first mortgage loan will be a 30 year fixed rate FHA or VA loan originated by your lender within NSP guidelines. The rate will be determined by current market rates and the lenders choice of investor. Georgia Dream first mortgage interest rates apply only when DCA funds the first mortgage loan.

     

11. Can I use the Georgia Dream NSP program to purchase a short-sale or a home that is pending foreclosure?
    No. the property must have been foreclosed and the title transferred to the mortgage lien holder or an eligible agency. Eligible properties must be owned by HUD, VA, USDA, Bank, Government Entity or an eligible Non-profit.

     

12. Can the Georgia Dream NSP program be used to purchase a home that was a foreclosure, but was already rehabbed by an investor making the home move in ready?
    Only if the investor used a local government’s NSP program to purchase and rehabilitate the home.

     

13. Can I use the Georgia Dream NSP program if I am also using the DCA Housing Choice Voucher Program?
    Yes. However, you must use a Georgia Dream participating lender who also participates in the HCV program. Foreclosed properties in need of repair may not be eligible for purchase. When using the HCV program the first mortgage must be a Georgia Dream first mortgage loan and will be serviced by State Home Mortgage. Consult your Rental Assistance Counselor or your participating lender for complete details.

1. Is this tax credit limited to first time homebuyers?
NO, all purchasers of an eligible single family residence in Georgia that file a Georgia income tax return can claim the credit.

2. Can the Georgia credit be combined with the federal $8,000 first time homebuyer tax credit?
YES, if buyers meet the qualification for each credit they may claim both. Each credit operates independently from the other. One is claimed on your federal income tax return, the other is claimed on your Georgia income tax return.

3. Is it true this credit is limited to the purchase of a single family residence?
YES, the tax credit is limited to the purchase of one single family residence.
Single-family residences (including condominiums) are eligible if they are:
 * New residences, residences occupied at the time of sale, or previously occupied residences, if such residences: 
    - Were for sale prior to the effective date (5/11/09) and were still for sale after the effective date; 
 * Owner-occupied residences with respect to which the owner’s acquisition debt is in default on or before March 1, 2009; and 
 * Residences with respect to which a foreclosure event has taken place and which are owned by the mortgagor or the mortgagor’s agent.

4. Is it true that eligible single family residences must have been listed prior to May 11, 2009 in order to qualify for the credit?
YES, the original intent of the bill was aimed at reducing the housing stock that has been on the market for an extended period of time.

5. Is it true that only eligible buyers that close between June 1, 2009 and Nov. 30, 2009 can claim the credit?
YES, the intent of credit is to stimulate the market by encouraging potential buyers to get off the fence and BUY NOW!

6. How do I determine the amount of tax credit I am eligible for?
The tax credit will be for 1.2% of the purchase price, with a maximum credit of $1,800 (whichever is less). Homes purchased for $150,000 or more will receive a maximum of $1,800.

7. Can I claim all $1,800 on my 2009 income tax returns?
NO, the total amount of your credit must be claimed in one-third increments over a three year period. The maximum credit per year is $600 if you are eligible for the maximum $1,800. Any excess or unused credit may be carried forward to apply to succeeding years’ tax liability.

8. Can I amend my 2008 Georgia income tax return to claim the credit?
NO, the tax credit cannot be applied against prior years’ tax liability.

9. I am looking for investment property or a second home, is the credit available for the purchase of owner-occupied residences only?
NO, all eligible single family residences qualify for the credit. However, each taxpayer can claim the credit one time only.

10. Is there an income limit for buyers who claim the credit?
NO, there are no income limits applicable to this credit.

11. Is there a limit to how long a buyer must own the property to claim the credit?
NO, there is not a limit to how long a buyer must own the property.

12. Does any portion of the credit require repayment for any reason?
NO, if you are awarded the credit there are no penalties that would require you repay any portion of the credit.

Published: May 11, 2009

Would you like $8000 back on your taxes this year?

We've been hearing a lot of questions about the new tax credit. Who qualifies? How does it work? How long will it last? In this special edition video, we’re taking an in-depth look at the $8,000 tax credit for first time home buyers.

">

 According to the new legislation, a first time home buyer is defined as someone who has not owned a principle residence in the past three years.  Those three years are counted up to the date you take possession of the house you buy in 2009. This means that even if you’ve owned a home in the past, you can still take advantage of the tax credit as long as you haven’t purchased a primary residence since 2006.

The same goes for married tax payers - they must both be first time home buyers.  For non-married joint buyers, only one of them needs to be a first time home buyer, or someone who hasn’t owned a primary residence in the past three years.

Qualifying homes include:

• New homes
• Homes that are being re-sold
• Condos
• Townhomes

The main restriction is that the credit is only for those who buy a home as their primary residence. So investors looking to buy a rental property would not qualify for the credit.  However owning a vacation home or a rental property already does not neccessarily disqualify you from taking advantage of the credit (as long as you haven’t owned a primary residence in the past three years).

A Look at the Numbers

The tax credit is equal to 10% of the purchase price of the home, up to $8,000.   The amount of the credit you can qualify for is related to how much money you earn. Here’s how the credit is scaled:

• Single home buyers earning 95K or less qualify. If you make 75K or less, you qualify for 100% of the $8000. If you make halfway, 85K, you qualify for 50% or $4000. The credit phases out gradually between 75K and 95K of income. For example, if you make halfway between the income limits, 85K, you qualify for up to half of the credit.
• The same rate applies for married couples and joint buyers whose incomes limits are doubled to $150,000 to $170,000. Married couples or joint buyers whose incomes are less would receive the full $8000 credit. At an income level of $160,000, halfway between 150 and 170, the buyers would receive half the credit – or $4,000. And the credit phases out altogether at $170,000.

This credit represent a significant amount of money. One of the biggest points of difference for the new credit from the one congress passed in July of 2008, is that the new credit does not have to be paid back.

In addition, it's refundable, which means that if you’ve paid all your taxes as you go with an automatic payroll deduction, you would receive an $8,000 check from the IRS.

If you're committed to buying a house in 2009 and want to use the $8000 tax credit for a downpayment, consult with your certified public accountant.

In Summary

Qualifying home buyers will need to make their home purchase between January 1, 2009 and December 1, 2009. And the home has to remain their principal residence for the following three years.  

The new tax credit coupled with historically low mortgage rates and rising affordability, offers buyers a great opportunity if they act fast.

Call The Chapman Group for More Information 678-341-7477   chapmangroup@kw.com