Great News for First Time Home Buyers in Washington State

Great news and big news for the residents of Washington State regarding home ownership, buying and selling.

The Senate Ways and Means Committee last night unanimously approved a measure designed to help first-time homebuyers come up with a down-payment. The committee adopted the measure as an amendment to the proposed Senate biennial operating budget.

The proposal would make the $8000 federal tax credit for first-time home buyers available at the closing of a home sale instead of when a buyer files a tax return. Homebuyers would repay the $8000 after filing for and receiving a tax refund. The amendment creates a Tax Credit Advance Loan Program and authorizes the State Treasurer to deposit $25 million in a financial institution giving it the ability to open a line of credit to the State Housing Finance Commission to provide the down payment loans. The deposit would not deplete state funds, but would provide liquidity for the financial Institution to lend its own funds.

The program is the first of its kind in the nation and would work as follows:

•· The State Treasurer's Office would make an off-setting deposit in an FDIC-insured short-term
account with a selected financial institution. The investment would earn a low interest rate to
stay fully insured under federal guidelines.

•· Realtors and other stakeholders back the loans with funds to provide security against losses.

•· The financial institution provides the Washington State Housing Finance Commission a line of
credit to advance up to $8000 to qualified first-time home buyers for a down-payment.

•· Buyers repay the advance loan after filing for and receiving the tax credit.

The amendment is the result of the efforts of the Washington REALTORS®, Washington State Treasurer's office, and Washington State Housing Finance Commission. State Treasurer James McIntire wrote the budget proviso and is helping to advance the measure through the state legislature.

State Sen. Steve Hobbs (D-Lake Stevens), who offered the amendment, said that using the $8,000 tax credit to help first-time homebuyers make down payments could help jump-start the economy. Hobbs noted that home purchases have a significant impact on the retail and banking sectors of the economy and on state and local coffers. "In this recession we need to find new and innovative ways to stimulate the economy. This proviso will slow the decline of our housing market and stimulate the economy," Hobbs told the Senate Ways and Means Committee.

"Down-payment assistance to our first-time home buyers is the key we need to unlock economic activity throughout the state," said Greg Wright, President of the Washington Realtors. "This tax credit is new money that we can put to work now to help the housing market and ignite economic action statewide." According to a study by the Washington Research Council, each home sale by a first-time buyer generates $11,100 in state and local tax revenue. Every 1,000 home sales generate $126 million in general economic activity, supporting 711 jobs.

The goal of the program is to get the money to buyers efficiently and return the federal refund quickly so that the HFC can turn it around to provide more assistance. The funds may revolve as many as three times before the tax credit expires, reaching up to 9000 first-time homebuyers. These "bridge loans" would expire at the same time as the federal tax credit, on November 30, 2009. All of the bridge loan funds return to the state system by early 2010 to use for capital projects in 2010-11.

"With homes at affordable prices and interest rates at historic lows the $8,000 tax credit opens a window of opportunity that may never be seen again," said Wright, a Chelan Realtor. "The Senate's budget helps bring that opportunity to families throughout our state."

Lack of a down-payment is the only barrier to home ownership for up to 50 percent of first-time home buyers, according to J. Lennox Scott, Chairman and CEO of John L. Scott Real Estate. A recent study by the Federal Reserve Board showed that home ownership for people 35 years and younger increased by as much as 43 percent when a primary mortgage was combined with a down-payment assistance loan.

"First-time homebuyers are the most critical to the recovery of the housing market and our overall economy, because their purchases set off a chain reaction of buying and selling," Scott explained. "The first step toward stimulating the state housing market is making the federal tax credit available at the closing table and increasing down-payment assistance."

Are The Financial Heavens Opening up in Washington State

JP Morgan Chase is expanding it's home lending business in Washington State and will more than quadruple it's market share by the end of the year. Chase has seven branches and plans to open up four more offices this year.

As reported in the Puget Sound Business Journal "The financial's giant's plans are reflective of the state's rosy reputation among mortgage bankers, and also could indicate a resurgence of the mortgage industry as stable lenders step in to fill the gaps left by those that have gone out of business."

They also reported that Golf Savings Bank, a subsidiary of Spokane-based Sterling Financial Corp., is also expanding its home loan business and plans to add 20 new loan officers by the end of the year probably hiring former employees of Washington Mutual who just closed 23 offices in Washington State.

So buyers, get off the fence, we have a great economy here in Snohomish County, interest rates are low and there is plenty of inventory to choose from.

Contact me, Karen Villa Schweinfurth, ABR, CRS, SRES, e-PRO, REALTOR - "As no one knows Washington Real Estate like a Washington Realtor - 425-308-3669.

http://www.karensvillas.com

Washington Real Estate

Washington State - The Sky is NOT Falling

With all of the attention on the failing national housing market, many people have lost sight of the fact that Washington State is a unique market place. We have not seen the crash that most other states have. The median priced single family home in Snohomish County has dropped only .92% since last year. Here is why:

1. Washington has an extremely strong economy: unemployment is under 5 percent and according to the Washington State Office of financial management, we are projected to add another two million residents in the next 12 years.

2. Wshington has few subprime loans in danger of foreclosure so, contrary to what is happening in some states, we have fewer "distress sales" and foreclosures.

3. The historic low mortgage rates are tuning the market around. If you are renting, you are not along. There are thousands of people just like you who want to buy a home and are just waiting to see what the market will do. As these people enter the market, supply will go down and the market will heat up.

This is a great time to buy a home in Washington State. Be sure to ask a Washington Realtor, as no one knows Washington Real Estate like a Washington Realtor.

Please contact me for housing information and a special booklet for first time homebuyers. Karen Villa Schweinfurth 425-308-3669; or visit http://www.karensvillas.com

karen@karensvillas.com

Washington Realtors Hail State Budget

This week participated in the NAR Legislative Hill Day. I met with State Senator Patty Murray and Congressman Rick Larsen to promote affordable housing issues for Washington residents.

The following is a Press Release from the Washington Association of Realtors:

OLYMPIA, WA – Washington Gov. Chris Gregoire has signed new biennial transportation and building spending plans that include top priorities of the Washington Realtors, the state’s largest professional organization.
The 2007-09 capital budget (HB 1092) includes $4.2 billion in building projects that will improve schools and colleges, parks, and housing. The state’s 2007-09 transportation budget (HB 1094) spends $7.5 billion to put hundreds of road projects back on schedule and cover huge cost overruns.
“The state is investing in the backbone of our communities by improving the roads and buildings we depend upon for health, education, and prosperity,” said Steve Francks, Washington Realtors Chief Executive Officer. “These wise investments will help position our state to meet the demands of population growth we face over the next few years.”
In spite of the progress in funding critical infrastructure needs, however, Francks said the Legislature let down middle-class families by failing to address the state’s home-price crisis. Over the last five years home prices have risen more than 60 percent all over the state, while wages increased only about 14 percent. The resulting gap has created an affordability crunch of historic proportions, according to the Center for Real Estate Research at Washington State University.
Median-income families unable to find homes near work choose instead to commute to find an affordable home, which adds to the congestion on already-crowded state highways. The increase in commuters also contributes to air and water quality issues around the state. This bumper-to-bumper solution to housing problems doesn’t really save families much money, however. According to a recent study by the National Housing Conference, for every dollar a working family saves on housing, it spends 77 cents more on transportation.
“The Legislature had a chance to make a real difference for working families and our quality of life, but allowed inter-chamber bickering to kill common-sense solutions,” said Francks of HB 1727, which the House had approved by a vote of 97 – 0. The bill also had earned the approval of the Senate Government Operations & Elections Committee. Francks said the Washington Realtors would return to the Legislature next year with the measure, the key components of which include the following:
– Ensures comprehensive plans adopted under the Growth Management Act (GMA) identify appropriately zoned land for the number of homes actually needed to accommodate projected growth.
– Allows cities and counties to use a variety of techniques to accommodate housing needs, including mixed-use development and accessory dwelling units.
– Authorizes counties and cities to work together to address housing and employment markets that cross jurisdictional boundaries.
Last year, the Washington Realtors launched a public awareness campaign to inform the public about legislative solutions for the growing problem of the lack of homes for middle-income families and the relationship between adequate housing supply, housing affordability, jobs, traffic, and the quality of life in Washington.
The Washington Realtors also made infrastructure funding a high priority during the 2007 session of the Legislature. Francks said that, in addition to benefiting education and infrastructure projects, the capital budget directs a year-long study to identify strategies to integrate and consolidate infrastructure funding sources and simplify administrative processes — a process recommended by the Washington Realtors.
“Many communities are struggling to accommodate growth because they lack the roads, sewer, and other infrastructure that has to be in place before homes and businesses can be built,” said Francks. “The budget recognizes that the state directs more than a billion dollars through hundreds of accounts for infrastructure. This study will try to identify ways to make sure all of that money is going for the purposes for which it was intended.”
Francks said the passage of the state transportation budget supports 432 road and bridge projects throughout the state. The plan covers nearly $2 billion in construction-material cost overruns and includes about $3 billion in new construction over the next two years.