Extended Tax Credits For Energy-Efficient Home Upgrades

Again thanks to the American Recovery and Reinvestment Act of 2009, you can earn tax credits during 2009 and 2010 for installing qualified energy-efficient home improvements on your principal residence including windows and doors, roofs, insulation, HVAC systems, water heaters, solar energy systems and wind turbines. (Credits for such installations had expired at the end of 2008.)

In most cases, 30% of your total investment can be recouped, but the total tax credit claim for the improvements cannot exceed $1,500 (the old cap was $500). Systems and appliances must meet or exceed listed energy use specifications and, in some cases, installation, site preparation and assembly costs may not qualify.

For an overview of credits available for selected home improvements, go online to www.EnergyStar.gov. Be sure to consult with a tax professional before purchasing to ensure your upgrades qualify.

Appliances
The Energy Efficient Appliance Rebate Program provides $300 million to state governments to distribute to consumers who purchase Energy Star-rated home appliances such as refrigerators, dishwashers, clothes washers, etc. Energy Star-rated appliances (look for the label) use 10% to 50% less energy than standard models. Not only can you get a monetary rebate on your purchase, these appliances help you reduce your utility bills. Again, see www.EnergyStar.gov for more information.

Weatherization Assistance
Low-income homeowners are encouraged to make energy-saving improvements to their homes by the U.S. Department of Energy’s Weatherization Assistance Program (WAP).

If you qualify through one of the local weatherization agencies that carry out the program in your area, an energy audit will be conducted on your home. The audit will measure your home’s energy usage and recommend the best energy-saving methods to employ, with weatherization services provided at an average value of $2,500 per home. Improvements could include such things as increased insulation, weather-stripping, new windows and doors, etc.

Over one million home-owners are expected to benefit nationwide, with an average family’s estimated savings amounts projected to be about $350 per year in heating and cooling costs.

The WAP already has formulas in place for distributing the stimulus bill’s funds (about $5 billion) to all 50 states. Services are provided by each state, and each state has slightly different criteria to qualify. One of the primary eligibility factors is income. To see if your family (or someone you know) might qualify and to find out how to apply, visit www.TinyURL.com/aurbux.

Deduction For Private Mortgage Insurance Good Through 2010

In 2008, Congress extended the deduction for payments of qualified home mortgage insurance to homes purchased through December 31, 2010. (The opening date for the deduction is January 1, 2007.)

The full deduction is available to taxpayers with Adjusted Gross Income (AGI) not greater than $100,000, or $50,000 for married filing separately. Above those AGIs, the deduction is phased out and disappears completely for AGIs of $110,000 and higher ($55,000 for married filing separately).

In order to take the deduction, you must itemize deductions on your tax return -- see instructions on Schedule A (Form 1040) or consult IRS Pub. 936 for further details. Also, be sure to consult a professional tax advisor.

New Maximum Limit For FHA, Conforming Mortgages In 2009

The American Recovery and Reinvestment Act of 2009 reinstated 2008 loan limits for Federal Housing Administration (FHA) loans and "conforming" loans from Freddie Mac and Fannie Mae. Bear in mind, the limits vary by area.

The current limits are equal to the greater of 125% of the 2008 local-area median home price or $271,050 for FHA and $417,000 for Fannie and Freddie -- except for designated high-priced areas. While the Housing and Economic Recovery Act of 2008 had placed the 2009 upper limit for high-priced areas at $625,500, the most recent legislation increased the 2009 cap for expensive areas to $729,750. These limits are set to expire December 31, 2009.

To find out about the local loan limits where you are interested in buying or refinancing, just give us a call.