In my opinion, now is a great time for first-time homebuyers to make the move to purchase a home in Santa Clara County.  Prices are lower than they have been in years because of the downward pressure from short sales and foreclosures and mortgage interest rates are still very low.

Federal Stimulus Bill - The new Federal Stimulus Bill gives first time buyers a federal buyer tax credit of $8,000 and does not require the credit to be paid back if the buyer stays in the home for at least three years. To qualify for the $8,000 credit, homebuyers must have purchased a home after Jan. 1, 2009, and before Dec. 1, 2009.  The credit will be claimed on the buyer’s tax return to reduce the buyer’s income tax liability. If any credit amount remains unused, then the unused amount will be refunded as a check to the buyer.  A person is considered a first-time buyer if he/she has not had any ownership interest in a home in the three years prior to the purchase.

Mortgage Credit Certificate Program - In addition there is the Mortgage Credit Certificate Program (MCC) authorized by Congress in 1984 that provides financial assistance to first-time homebuyers.  This tax credit reduces the amount of federal income taxes otherwise due to the federal government from the Borrower.

The MCC program for Santa Clara County includes unincorporated area and the following participating cities: Campbell, Cupertino, Gilroy, Los Altos, Los Gatos, Milpitas, Morgan Hill, Mountain View, Palo Alto, San Jose, Santa Clara and Sunnyvale.  The income limits for 1 or 2 person households=$97,888; low income=$63,300.  The Home Purchase Price limits for 2008 are $570,000 for existing (resale) properties and $630,000 for new construction; these limits are still valid for 2009.

Unfortunately, at the current time, The SCC Office of Affordable Housing is out of MCC allocations, but they are taking a waiting list.  Call Tracy Cunningham 408-441-4323 for more details and visit they website by clicking>here.  The waiting list is established because 5-10% of the MCC Commitments issued have their deals fall through and then the agency can give that MCC to someone on the waiting list; there are currently 6 persons on the waitlist.  They do not cash the checks of those persons on the waiting list unless the actually receive an MCC Commitment.  The fee is $200 made out to the County of Santa Clara. The MCC application must be applied for and a Commitment issued prior to the close of escrow, after someone closes escrow they are not considered a first-time homebuyer anymore.

NOTE: This posting is for general information only, and should not be interpreted as legal or tax advice, nor should it be applied to any individual situation. Prior to acting, please consult your legal or tax advisor for information on how any of these laws affect you, your property or your decisions.