Knowing the tax laws can allow homebuyers and the Realtors® that assist them to make a move confidently and to save lots of money. California Propositions 13, 60, and 90 can positively affect people over 55 years of age.

Proposition 13:

Under Proposition 13, the value of a home, for property tax purposes, is reassessed to the new market level (the new purchase price) whenever a change in ownership occurs. This usually results in higher property taxes.

Prop 60:

Proposition 60 allows a transfer of base-year value of the principal residence sold of a senior citizen (55 and older) to a replacement dwelling of equal or lesser value within the same county.

Prop 90:

Proposition 90, enacted in the November of 1988 in California, and otherwise known as the “local option law”, provides an avenue for property tax relief to owners 55 and older who sell their principal residence and purchase a replacement home of equal or lesser value in another county.



The County Assessors will require a copy of the tax bill from the other county and a copy of the applicant’s birth certificate to be included with the application. Also, include a copy of the grant deed for the new purchase and a copy of the closing statements of both sale and purchase.

SUMMARY OF ELIGIBILITY REQUIREMENTS:

The seller of the original residence, or a spouse residing with the seller, 55 years of age or older, as of the date that the original property is transferred.
The replacement property must be of equal or lesser “current market value” than the original.
The tax base year of the original property cannot be transferred to the replacement dwelling until the original property is sold, BUT (and this is the cool part) the replacement property must be purchased or newly constructed within two years (BEFORE OR AFTER) of the sale of the original property. This allows the property owner to take advantage of a low market, like the one we’re in, and sell when things are selling more briskly or vice versa. This just means that the homeowner will be taxed on the new property at the assessed rate until the sale is made on the original property and the proper paperwork is filed with the county. The owner must file an application within three years following the purchase date or new construction completion date of the replacement property.
This is a one-time-only filing. Proposition 60/90 relief cannot be granted if the claimant, or spouse, was granted relief in the past.
Proposition 60/90 relief includes (but is not limited to): single family residences, condominiums, units in planned unit developments, cooperative housing, corporation units or lots, community apartment units, mobile homes subject to local real property tax, and owner’s living premises which are a portion of a larger structure.
The taxpayer is not eligible for the tax relief until they actually own AND occupy the replacement dwelling as their principle residence.
If the buyer is moving to another county, it is essential that you call the co-operating County in question, to verify that they are currently accepting the value transfer under Proposition 90, and what their requirements are. If you have any questions, the property tax office in Sacramento for all counties in California may be reached at (916) 445-4982.

Contact me for more information.

John Easterbrook (916) 486-6969 jeasterbrook@teamvitek.com

New money is now available for the SHRA MCC program. This program blows away the $8,000 First-time Homebuyer Tax Credit, if the borrower keeps the loan in place for more than five years as an owner occupant.

The Sacramento Mortgage Credit Certificate (MCC) Program is designed to provide homeownership assistance on home purchases within the cities of Sacramento, Elk Grove, Folsom, Isleton, Galt, Citrus Heights, Rancho Cordova and the County of Sacramento. The MCC reduces the amount of Federal income tax a homebuyer pays, thus giving more available income to qualify for a mortgage loan and to make monthly mortgage payments. This new allocation won’t last very long, so take advantage of it while you can. Below are a few keep points on the MCC loan program.

Program Features:

• 20% Mortgage Credit Certificate – a tax credit of 20% of the annual mortgage interest paid (amount of the credit cannot be more than the annual federal income tax liability after all other credits and deductions have been taken into account)
• MCC will be in effect for the life of the original mortgage loan provided property remains owner occupied
• MCC may be reissued one time, upon the first refinance of the original mortgage loan
• MCCs may be used with conventional loans, fixed-rate or adjustable loans, FHA and VA loans (MCCs are not available with bond-backed loans such as CHFA or Cal-Vet)
• 40 percent of an MCC allocation is reserved for households whose income does not exceed 80 percent of the area median adjusted for family size

Eligible Applicants Include Homebuyers:

• Who are first-time homebuyers (have not owned and occupied a home as a principal residence within the preceding three years) (in federally designated target areas, you do not have to be a first-time homebuyer)
• Able to qualify for a loan to purchase the home
• Who will live in the home being purchased
Who do not exceed the following income limitation:
• 1 or 2 person household $73,100 (non-target areas) $87,720 (target areas)
• 3 or more person household $84,065 (non-target areas) $102,340 (target areas)

Eligible Properties Include:

• Single family homes that are located within the cities of Sacramento, Elk Grove, Folsom, Isleton, Galt, Citrus Heights, Rancho Cordova and the unincorporated areas of the County of Sacramento.
Maximum purchase price limits:
• New and Existing Homes $506,795 (non-target areas) $619,417 (target areas)

Contact me for more information or a list of federally designated target areas.

John Easterbrook (916) 486-6969 jeasterbrook@teamvitek.com

Whether you are a homebuyer, Realtor®, or Escrow Officer, chances are you have endured a frustrating transaction by not knowing what is happening with your loan. Now with VITEK’s ‘Real-time Loan Status Updates’ (LSU), you will always know where your loan is in the process! We believe communication is vital to ensuring a smooth and successful transaction for our clients. Along with our new Loan Origination Software (LOS) we recently launched, we have programmed ‘Loan Status Updates’ into the loan process to keep you informed of important milestones in the transaction, as they happen.

When VITEK is your lender, in addition to phone calls from your mortgage loan originator, you can expect to receive email notification of important events in the loan process, triggered by the actions of our different loan departments.

A few important LSU’s that you can expect to receive include:

• Preliminary Title Report Received
• Loan Assigned an Underwriter
• Loan Approved with (or without) Conditions
• Loan Documents Ordered
• Loan Funded!

To help ensure your loan closes quickly, in addition to communicating with you on the status of your loan, we also keep you informed on important information you will need to take note of throughout the transaction.

If you want to stay fully informed throughout your loan transaction, allow VITEK to walk you through the home loan process. You won’t be disappointed!

Philip Duncan Executive Vice President

These outstanding accounts on your credit report can cause roadblocks in purchasing your dream home. If you have any questions on home financing, and how VITEK can help you purchase your dream home, contact one of our mortgage loan originators today.

	I have a client who states that he contacted the bureaus directly (yes, the bureaus) and relentlessly. When we started he had two disputed accounts and now, zero! Jessica Robinson
	Get on the phone with the creditors. Demand a letter stating that the accounts are no longer in dispute. Its not easy. Insist on talking with a manager if they won’t do it for you. One other thing, you must have the borrower on the phone with you initially. They can usually authorize you for 24 hours. John Easterbrook
	Are they disputed accounts? If so, my client called her creditor and asked them to remove the disputed status of the account. The creditor wrote a letter to the bureaus taking the account out of dispute, and they sent a copy of their letter to the borrower, which she received about 3 days later. I sent that in to score plus, they contacted the creditors to verify status and another 3-4 days after that we had a new credit report with no disputed accounts! Vicki Fargo
	Pray to the man above that those creditors will write you a letter stating that the accounts are current and that they are no longer being disputed. A creditor wouldn’t give my client a letter and it prevented them from getting a home loan. Johnathan Hudak
	Unfortunately, get ready to hurry up and wait. The credit bureau requires a letter from the creditor that the account is no longer in dispute and that these words will be removed from all three bureau’s. The letter works well with Equifax and Experian but Trans Union puts the account under investigation. This process took me three tries and six weeks. Equifax and Experian rescore can be accomplished in 7-10 days, maybe sooner by CBC, but the Trans Union process is a waiting game.I believe the reason it took so long is because my borrower kept calling the creditor and disputing the dispute. Just do it once and wait. CBC will keep checking for you. Seriously a pain, but we finally closed yesterday. Good luck! Mary Westphal

TRENDGRAPHIX’s latest report shows a 38% increase in pended sales for the month of June for the four-county region of Sacramento, Placer, El Dorado and Yolo Counties. This increase was surprising; especially given the 12% decline in pended sales the previous month. Seeing such a steep increase in sales in conjunction with increasing inventory and flat prices is not common. “We can only attribute this to 50 year lows in interest rates and well priced inventory,” stated Michael Lyon, CEO - Lyon Real Estate. “Most sellers realize that only aggressively priced properties are selling now; which is giving buyers a lot of options. This latest jump in pended sales is yet another recovery step towards stable housing prices.”

The June Trendgraphix report also shows that closed sales decreased 2% during the month of June for the four-county region of Sacramento, Placer, El Dorado and Yolo Counties; and June 2010 sales were 2% lower than June 2009. June 2010 inventory of 7,529 homes for sale is 4% higher than June 2009 inventory, representing a 51% decrease from the regional inventory record high of 15,302 homes for sale set in August 2007.

COUNTY HIGHS AND LOWS

Sacramento County sales decreased 3 percent from May to June 2010. Inventory increased 8 percent during the month of June. Pending sales increased by 42 percent in the month of June. 52 percent of the homes sold for under $200,000; 41 percent of the homes sold for between $200,000 and $400,000; and 7 percent of the homes sold for over $400,000. The average price per square foot decreased 2 percent during the month of June to $125.

Placer County sales increased by 5 percent and inventory increased by 8 percent during the month of June 2010. Pending sales increased by 25 percent from May to June. 4 percent of the homes sold for under $200,000; 51 percent of the homes sold for between $200,000 and $400,000; and 45 percent of the homes sold for over $400,000. The average price per square foot decreased by 1 percent during the month of June to $146.

El Dorado County sales decreased by 1 percent from May to June, and the inventory increased by 7 percent from May to June. Pending sales have increased 43 percent during the month of June. 21 percent of the homes sold for under $200,000; 39 percent of the homes sold for between $200,000 and $400,000; and 40 percent of the homes sold for over $400,000. The average price per square foot increased 1 percent during the month of June to $153.

Yolo County sales decreased by 15 percent for June 2010 and the inventory increased by 2 percent. Pending sales increased 37 percent during the month of June. 24 percent of the homes sold for under $200,000; 48 percent of the homes sold for between $200,000 and $400,000; and 28 percent of the homes sold for over $400,000. The average price per square foot increased 6 percent during the month of June to $171.

Nevada County sales have increased by 48 percent during the month of June, and inventory increased 9 percent. Pending sales decreased by 17 percent. 5 percent of homes sold for under $200,000; 48 percent of the homes sold for between $200,000 and $400,000; and 47 percent of the homes sold for over $400,000. The average price per square foot increased by 9 percent during the month of June to $190.

San Joaquin County sales have increased by 4 percent during the month of June, and inventory increased by 9 percent in June. Pending sales increased 34 percent. 38 percent of the homes sold for under $200,000; 50 percent of the homes sold for between $200,000 and $400,000; and 12 percent of the homes sold for over $400,000. The average price per square foot decreased 2 percent during the month of June to $101.