Northern Virginia Foreclosure Buyers May Get $7k Tax Incentive
In response to the growing number of foreclosures, the Foreclose Prevention Act of 2008 offers ways to combat the negative national effects of foreclosed properties. According to Realty Trac, 1.77 million homeowners faced foreclosure in 2007, a 78 percent increase over 2006. This latest legislation offers a tax incentive for buying foreclosures to improve the face of communities across the nation.
The Joint Economic Committee of the United States Congress estimated the country will suffer a loss of $71 billion in home equity due to the current foreclosure crisis. Foreclosed properties compromise the wealth of individuals and our nation as a whole. Besides the loss of equity, the value of surrounding properties are brought down when foreclosed houses remain unattended and unkempt.
For a great deal on your future Northern Virginia home, foreclosures are a good place to start. The Foreclosure Prevention Act of 2008 proposes a significant $7,000 tax credit to people purchasing foreclosed homes. This incentive is designed to jump start the housing market so more people purchase affordable foreclosed Northern Virginia homes. The legislation benefits individual buyers, the banking industry and neighborhoods across the country.
Homeowners facing bankruptcy and foreclosure are offered relief by the Foreclosure Prevention Act of 2008 and the Emergency Home Ownership and Mortgage Equity Protection Act of 2007. Ellen Hornick, attorney for the Center for Responsible Lending, stated, “This will help 600,000 households avoid foreclosure this year and next.”
Other benefits afforded by the Foreclosure Prevention Act of 2008 include:
- FHA reform raising the FHA insured loan limit to $550,000, making high cost housing more attainable;
- $10 billion for tax exempt bonds to refinance subprime loans;
-$ 4 billion in grants to local states and governments to buy and refurbish foreclosed homes for affordable housing;
-$100 million for housing counseling to prevent loan defaults;
-A foreclosure stay for up to 9 months for veterans returning from action overseas;
-Property tax deductions of $500 for individuals and $1,000 for couples who do not itemize their deductions on annual tax returns;
-Tax breaks for homebuilders; and
-Improved mortgage disclosures.
Savvy Northern Virginia home buyers can take advantage of the current state of the real estate market by purchasing foreclosed properties. When properties sit for a long time without occupants, they are subject to overgrowth, disrepair and vandalism. Because of the Foreclosure Prevention Act of 2008, these properties will move more quickly and be in better condition. Buyers can find a dream foreclosed house at an affordable price, get a decent mortgage and appreciate a $7,000 tax break as a further bonus.
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