But, Senator Johnny Isakson, former real estate agent and last year’s advocate for the 2nd extension, is not on board.  Last November, Linda Goold, NAR’s director of tax policy practically told the public and Realtors that the second tax credit extension would be the last one.

Can the government afford to extend the tax credit for a third term?  Where are we getting all of this money since are deficit is at a record high level?

If the government extends the tax credit for a third time, it will help the real estate market.  But, when the credit was extended in November, many buyers went “back on the fence” knowing that they had more time to purchase and still receive the $8,000 tax credit.  Sales in November to February have been slow as buyers have more time to wait.

If the government announces that there will be no further extension, then there will be a strong urgency for potential buyers to purchase properties by the March 31st deadline!  Please read my article on the tax credit guidelines by clicking:  FHA Mortgage Guidelines Will Tighten In The Spring

FHA Mortgages are very popular and account for over half of all purchases for first-time homebuyers.  FHA Mortgages give buyers the opportunity to purchase property with a small down payment and also allow for seller concessions to help with closing costs.

Here are the changes that will take effect in the Spring/Summer of 2010:

• .50 percent increase in insurance premiums from 1.75 percent to 2.25 percent of the value of the loans.
• 3% seller concessions instead of 6% of the sales price to help buyers with closing costs or to buy down interest rates.
• Borrowers with credits scores under 580 will have to put down 10% of the purchase price instead of 3.5% of the purchase price.

FHA insured 5.8 million single family homes with mortgages valued at $750 billion in 2009.  FHA is trying to learn from the lending mistakes of the past, as last year’s cash reserves drastically declined below a level that Congress and the government requires.

Great news is that mortgage rates are still at record lows, and the $8,000 tax credit is still in effect until this Summer.  After hearing about the new FHA guidelines that will take effect, I am telling “on the fence” potential buyers that NOW is the time to purchase a home in Parkland or anywhere in South Florida!

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If you are interested in buying or selling a real estate property in Parkland, please give us a call at 954-609-0591 or send a note to the squawk.