On February 17, 2009, the U.S. Government also added another compelling reason to install energy efficient appliances and upgrades before the end of 2010.  The American Recovery and Reinvestment Act of 2009, also called the Stimulus Bill, offers homeowners potentially thousands of dollars of tax breaks for installing energy efficient appliances and systems in their principal-residence homes in Denver and the U.S. 

There are tax credits extended from previous legislation as well as new incentives.  Here are some of the main threads woven into the bill:

• Tax credits for some improvements have increased from 10 percent to 30 percent since last year.
• Windows are no longer limited to a $200 maximum and requirements for types of windows have tightened.
• Tax credits are only issued if the improvements are “placed in service” between January 1, 2009 and December 31, 2010 with some exceptions.*
• The maximum credit is $1,500 for two years based on 30 percent of the cost.  Total cost may be $5,000, up from $500, in addition to the exceptions listed below. 
• *Exceptions to the maximum include geothermal pumps, solar water heaters, solar panels, fuel cells, and windmills.  Additionally, homeowners have until 2016 to install these upgrades.
• In order to qualify for tax credits, submit the Manufacturer Certification Statement and receipts.

The government’s EnergyStar website suggests several important steps for homeowners who are interested in “green” remodeling.  They offer several tools for evaluating homes and suggest professional comprehensive home assessments. 

Common signs of energy leakage include cold, drafty, or uncomfortable areas of the home, moisture on windows, high-energy bills, cold floors, ice dams, dry winter air, high humidity, and excessive dust.  Water leaks are apparent through peeling paint, mold, mildew, wood rot, damp basements, and structural damage.

Solutions range from increasing insulation and infiltration to installing a proper air-conditioning or heating system to removing leaks around windows and installing new roofs, biomass stoves, solar energy systems, and fuel cells.  Homeowners who conquer these structural elements in their homes will save money on bills while making their homes more appealing to potential buyers.

For more information about real estate in the greater metro area, including farms and horse properties, call Michael Paul of Realty Oasis at (303) 268-6052.

Buyers today have the largest selection of Denver homes that has been available in 15 years.   With FHA loan limits for real estate in the Denver metro area recently increased to $406,250, first-time home buyers may be able to choose more favorable neighborhoods for their families—neighborhoods that looked too expensive a couple of years ago.   Additionally, they may be able to select larger homes with extra bathrooms or bedrooms.  The stimulus package increased the FHA loan limits for the remainder of 2009 and we do not know future plans. 

In a buyers’ market like we have not seen for 8 years, great deals can be found.  Home prices are reduced, having been stripped of inflated equity.  Sellers are also willing to negotiate, to pay down interest rates, and/or to pay many of the buyers’ closing costs.  One more thumbs up!

We are seeing some of the lowest interest rates of our lifetimes.  Moreover, if rates go down even more dramatically, the FHA has a streamlined refinance program wherein buyers will not have to re-qualify.

Now, about the tax credit for first-time homebuyers:  If a home is purchased before December 2009, the buyer may receive up to $8,000 or 10 percent of the value of the home in tax credit.  The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes over $75,000. 

A tax credit is not a tax deduction.  It is equivalent to money.  For example, a homeowner who owes $8,000 in income taxes for 2009 may not have to pay a dime.  If the taxpayer doesn’t owe anything, he/she could receive a check for $8,000—just for buying a home this year.

Somewhere between impatient sellers, the roller-coaster economy, and the stimulus package, first-time buyers look to be in the most advantageous position.  Through FHA, they can still get into a home with 3 percent down, a job, and reasonable credit.  They have the added flexibility of not needing to sell their existing homes in order to move.  Sound like first-time homebuyers are the all-around winners this year.

For more information about real estate in the greater metro area, including farms and horse properties, call Michael Paul of Realty Oasis at (303) 268-6052.