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July 30th, 2009 8:09 AM by David W. Welch
I wrote a little while ago about the state of Florida making it possible for first time buyers to be able to use the tax credit up front. There are couple of issues that seem to be holding this up. First, the state and county governments seem to be a little at odds as to how to administrate and exactly who is fronting the money. Second, I have heard that the plan is to make this money in the form of an 18 month balloon loan, which I understand may be in conflict with FHA policies. Since most first time buyers are using FHA financing this could be a big deal. Finally, the banks are still trying to figure out how this fits into the whole financing scenario.
When you add these issues with the fact that FHA will not allow this money to count toward the buyers' 3.5 percent out of pocket and the fact that we are quickly running out of time (see my tax credit countdown), I believe it is unlikely this will help many people. The good news is that there is still time to take advantage of the tax credit. If you just are not able to find a home and close before November 30 this year, great deals will still be available in Orlando real estate for while. Right now, prices have stabilized and the market has been experiencing solid sales numbers. Until we work through the foreclosures and short sales and the job market begins to improve prices will remain lower.
I do believe that the super low interest rates will begin to rise first as economic indicators continue to turn positive. Then jobs numbers will begin to improve slowing the number of short sales and foreclosures. This will also cause sales to pick up and begin to push home prices back into an upward trend by the end of the first quarter next year.
Orlando Real Estate, David Welch Real Estate Optimist