At the start of the talk, the original tax credit was going to be $15,000, however, after all the negotiating the tax credit is $8,000, which is still a good amount to help you purchase that new Las Vegas home.

Eligibility for the $8,000 Tax Credit

In order to receive the $8,000 tax credit you must be a first time buyer. The law explains a first time homebuyer is one that has not purchased a home three years prior to the purchase of the new home. If a couple is purchasing the home, the records of both spouses will be used to determine if they are first time buyers.

You must purchase the new home on or after January 1, 2009 and prior to December 1, 2009. The purchase date is defined as the date of the closing when the homeowners receive title to the property. The property purchased can be a new home or a resale home. The home must be the principal residence, meaning the homeowner must live in the home, it cannot be a vacation home, a rental property, or for resale purposes.

Type of Las Vegas Homes that qualify for the $8,000 tax credit

Any home that will be the principal residence of the homeowner including single family detached homes, attached homes such as condos or townhouses, manufactured homes, and houseboats.

Determining the Amount of the Tax Credit

The tax credit is determined by calculating 10% of the purchase price of the home up to $8,000.

Income Limits

The income limits are determined by a person or persons modified adjusted gross income. The MAGI is the total income for the year minus specific deductions prior to the figure you receive after the itemized deduction on personal exemptions or Schedule A. If you look at your Forms 1040 and 1040A, the adjusted gross income is the last figure you find on page 1 and 1st figure on page of the form. Take this figure and add such things as foreign income, foreign-housing deductions, student-loan deductions, IRA-contribution deductions and deductions for higher-education costs, this will be your MAGI.

The tax credit is reduced for homebuyer that has a MAGI of over $75,000 for singles and $150,000 for married filing a joint return. The tax credit is reduced to zero for those that have a MAGI of over $95,000 for singles or $170,000 for married. The rest of the individuals that fall somewhere in between will be reduced accordingly.

In some cases, if you are over the MAGI limit you may still qualify for a partial tax credit.

The Difference between the new $8,000 Tax Credit & the Tax Credit enacted in July of 2008

The major difference is that Obama Administration tax credit does not have to be repaid, as does the July 2008 tax credit, which is really an interest free loan.

If you need a further explanation of the Tax Credit for First Time Home Buyers program please contact the Realty ONE Group professionals at (702) 612-7679 for assistance.

Other real estate bloggers have inaccurately described this program as being designed for homeowners with sub-prime loans that need relief. This program is for anyone with a mortgage that is 90 days delinquent regardless of what type of mortgage it is. According to U.S. Secretary of Treasury Henry Paulson, "This is an important new initiative targeted not only sub-prime borrowers, but all 90 day delinquent homeowners."

Project Lifeline will give a 30 day grace period for homeowners that have mortgages with the participating six mortgage companies only. This 30 day foreclosure reprieve is to allow delinquent homeowners time to seek refinancing.

This as other programs before it does little to address the real problem with foreclosures here in the Las Vegas real estate market and elsewhere, and falls woefully short of any real solution for distressed homeowners or the Las Vegas real estate industry. Project Lifeline is little more than a “feel good” news item that only those unaffected by foreclosure would or could receive any solace from. A 30 day reprieve on foreclosures is simply not enough time for a distressed homeowner to refinance.

I am not advocating that our government step in a bail out homeowners that bit off more than they could chew but I am sick and tired of these "do nothing" programs that are being announced weekly as if they will have a positive impact on a deteriorating situation. If our government intends to act then they need to do so in a positive manner. If they intend to let the situation work itself out than they need to so state their intentions and let the market take its hits and begin a natural healing process. This weekly deception guised as potential government intervention of foreclosures is slowing down the market recovery and needs to stop. It is time for our government to quit riding the fence. Either fix it or state clearly that you have no intention of fixing it.

However, what does the Economic Stimulus Act of 2008 have to do with the real estate market? The good part for homebuyers facing foreclosure is that FHA, Fannie Mae, and Freddie Mac will have an increase in the limit of the loan they can give to people wishing to purchase a home or refinance their home at a better interest rate. In the areas where the cost of living is very high, the percentage will rise from 87% to up to 175% whereas in other areas the percentage will rise from 48% to 65%. Along with this, it will also increase loan limits for single-family dwellings from Freddie Mac and Fannie Mae from $417,000 up to $729,750 that covers loans made between July 31, 2007, and December 31, 2008.

In smaller communities where the cost of living is not high, loans from either agency may not increase.

With the increase in loan limits, more people will be able to purchase homes since the government guarantees the loan. This is a great benefit for many that wish to purchase and receive all the added benefits that come with these programs. The increase in the loan limits along with the benefits will allow more homebuyers the opportunity to step up and purchase their dream home. In addition, individuals in ARM loans or high monthly payments will also be able to refinance through FHA, Fannie Mae, or Freddie Mac enabling them to avoid foreclosure.

The numbers are now expected to fall 17.7 percent to just a little over 1 million. Seeing falling numbers fall on charts is usually not a good sign, however in this instance the numbers do not reflect the fantastic year that new-home sales had in 2006.

This past year new-homes sold ranked fourth in history. Many experts will admit that 2006 was somewhat like riding a bucking bull, every time you thought the market was going one way, without any indication it went the other.

This is part of the reason why predictions for 2007 have not been as pretty as those of last year. Experts are predicting that new-home sales will slide at least 9.4 percent.

Also to blame for this numbers slide are high construction costs in many areas. Housing is overpriced to compensate builders and lack of homes being sold is taking a bite out of profits

NAR has started ad campaigns that they hope will bolster the real estate market. Ad campaigns have been placed to spread the news, to let consumers know that home buying opportunities are exceptional.

The campaign began in early November urging households not to wait if they’re thinking of buying or selling. The ads hit major newspapers and journals across the nation and were published in some of the most prestigious and most read periodicals.

Some of the newspapers include but are not limited to The New York Times, The Wall Street Journal and USA Today. Included with the ad campaign was also an extensive broadcast component.

According to experts buyer hesitancy has been the driving force behind the market slowdown. Experts also say that the negative spin being put out by the media is putting fear into consumers and could potentially cause the housing bubble that they all report on.

NAR’s counter is to use the ads to ease households off the fence and provide information about favorable trends ad point out that rising inventories of homes for sale give buyers the best selection.

Also worth pointing out is that the national economy is solid, interest rates remain historically low and jobs are being created.

In the rare times that these things have been in the favor of the consumer, the market has thrived and those at the National Association of Realtors hope to see it thrive again.

However both September and October show higher mortgage rates than this time last year. Last week Freddie Mac reported that the 30 year rate dropped to its lowest since January of this year.

Many experts are saying that sellers in most of the country are doing what it takes to attract buyers. One expert reported that with the exception of parts of the West, sellers are cutting their price enough to encourage sales.

History shows that when there is a good market for sellers in areas with rising jobs and a growing population where prices remain moderate than those are the places with the strongest price growth.

Las Vegas home buyers are only pay a little more on fixed-rate mortgages than they were a year ago. This number is considerably lower than the 7 and 8 percent they were paying in the mid to late 90′s. These low rates are a huge part in the healing process of the Las Vegas real estate market we are experiencing now.

When you look at it, Las Vegas consumers are paying just a point more than they were in the summer of 2003, when rates had bottomed out at 5.20 percent. That was the lowest average rate since 1985.

It’s no secret that many investors came in late last year trying to buy up real estate and flip it for an easy profit. Now experts are saying that with the Vegas market moving to a buyer’s market, investors are having the squeeze put on them.

Mortgage interest rates are lowering, however, with the current conditions of the market that is not enough. There doesn’t seem to be an end in sight for the woes of Las Vegas real estate experts.

There have even been predictions that the Las Vegas homes numbers could triple again in the next six to nine months. The latest reports show that there were over 2,016 foreclosures recorded in August.

Last year at this time there were only 568 Las Vegas foreclosures recorded. We will have to wait and see where this shaky market will take us.

Stats recently released show that about a third of the homes in Las Vegas are now in foreclosure that were bought in 2004 and 2005 with adjustable-rate mortgages.