Freshly Squeezed Tenants!

Tenants Pressured to Buy – Rent Increases

Prop 10 notwithstanding, tenants have two clear options when faced with increasing rents – move to a lower cost area or buy.  Rents in all areas including Sacramento have hit an all-time high.  The median rent in Sacramento is $1,940 – 6.5% higher than a year ago. 

Although lower than the median rent in San Francisco ($3,460), a payment of around $2,000 can buy quite a nice home in the Sacramento area.  The deterrent for most buyers is saving up for the down payment.  But many already have the resources to buy and just don’t know it yet.

There are 1^st time homebuyer options that will allow buyer to purchase with close to $0 down.  There are also attractive conventional loans with down payments of only 3% plus closing costs. 

Another huge benefit to first timers is MCC. This program allows a 20% tax credit (not a deduction) of the interest that is paid on the loan to boost their return at the end of the year.  They will love you every January when they apply for a refund.

There’s nothing wrong with renting and not everyone should be a homeowner.  One compelling fact, however, is that, according to the Federal Reserve, the typical home owner will have five times the wealth in their lifetime than the typical renter. 

On the Easterbrook Team, we confidently believe that with our Realtor partners, we are performing a valuable community service by helping people achieve home ownership. 

New Program Reduces Federal Income Tax a Homebuyer Pays!

New money is now available for the SHRA MCC program. This program blows away the $8,000 First-time Homebuyer Tax Credit, if the borrower keeps the loan in place for more than five years as an owner occupant.

The Sacramento Mortgage Credit Certificate (MCC) Program is designed to provide homeownership assistance on home purchases within the cities of Sacramento, Elk Grove, Folsom, Isleton, Galt, Citrus Heights, Rancho Cordova and the County of Sacramento. The MCC reduces the amount of Federal income tax a homebuyer pays, thus giving more available income to qualify for a mortgage loan and to make monthly mortgage payments. This new allocation won’t last very long, so take advantage of it while you can. Below are a few keep points on the MCC loan program.

Program Features:

• 20% Mortgage Credit Certificate – a tax credit of 20% of the annual mortgage interest paid (amount of the credit cannot be more than the annual federal income tax liability after all other credits and deductions have been taken into account)

• MCC will be in effect for the life of the original mortgage loan provided property remains owner occupied

• MCC may be reissued one time, upon the first refinance of the original mortgage loan

• MCCs may be used with conventional loans, fixed-rate or adjustable loans, FHA and VA loans (MCCs are not available with bond-backed loans such as CHFA or Cal-Vet)

• 40 percent of an MCC allocation is reserved for households whose income does not exceed 80 percent of the area median adjusted for family size

Eligible Applicants Include Homebuyers:

• Who are first-time homebuyers (have not owned and occupied a home as a principal residence within the preceding three years) (in federally designated target areas, you do not have to be a first-time homebuyer)

• Able to qualify for a loan to purchase the home

• Who will live in the home being purchased

Who do not exceed the following income limitation:

• 1 or 2 person household $73,100 (non-target areas) $87,720 (target areas)

• 3 or more person household $84,065 (non-target areas) $102,340 (target areas)

Eligible Properties Include:

• Single family homes that are located within the cities of Sacramento, Elk Grove, Folsom, Isleton, Galt, Citrus Heights, Rancho Cordova and the unincorporated areas of the County of Sacramento.

Maximum purchase price limits:

• New and Existing Homes $506,795 (non-target areas) $619,417 (target areas)

John Easterbrook (916) 224-7653 john.easterbrook@spmc.com Licensed – NMLS # 226555