1st time homebuyer ?

[baby_isis]

I'm recently remarried- I have a house that I hate...long story...gave it to ex husband who then trashed it & almost let it foreclose, I had to take it back because he never refinanced so he was killing my credit.  It still needs work before I can rent it out but I plan to do so.  My new husband has never owned a house before and I've finally worn him down to purchase another house.   He is ex-military so should be able to get a VA loan (hopefully), but he doesn't have alot of credit (2 new credit card accounts opened <6 month ago, 1 old one that I know closed on bad terms).  He also works a fed job for Dept. of Defense as a police officer, so I'm hoping that the community that I'm eyeing will extend the military/police officer discount to him.  We haven't checked his credit scores yet (as we just started talking house business).  My score hovers somewhere around 670- no late payments in a few years, none of my credit cards have had late payments ever, no collections, etc- just trying to pay down cc balances to up my score- most of my debt is student loans.  Together, we make about $130,000/yr. 

My question is- if he can get approved for a VA loan (not holding my breath, but it would be nice), can he get 1st time homebuyer assistance for down payments/closing using me as a co-borrower so that my credit score can boost him, or would he have to apply alone?  I also am wondering if he'd be able to still qualify for the tax credit if I'm a co-borrower.  I think that we may have to try an FHA if he can't take advantage of VA or 1st time homebuyer, but I'm trying to go a route that will cost the least (or no) money for us, as we hadn't saved for any down payment yet since I didn't think he'd ever give in.  

In addition, if I apply as co-borrower, then we'd have to be able to qualify having enough income to cover the new mortgage and my current one, correct?  Selling the current house isn't an option now because of the rehab it needs- I wouldn't be able to get an offer that would pay off the mortgage, although I do still have a small amount of equity, even with the slump.  Plus, I think I'd rather rehab and rent it out anyway...   

Any advice would be appreciated- I already know we'd be able to cover both payments as he's paying for an apartment in the city where his job is, and I'm paying the mortgage here.  

[Anonymous]

I don't know about the first time homebuyer.  I suppose it depends on the program you are talking about.  As for the tax credit, its my understanding that if you or your spouse owner a home w/in 3 years you can't get the credit. 

If you are on the loan your debt will count so you will need to have enough income to cover both mortgages unless you have already rented out the other house - but lenders and getting picky on this and I don't know what the requirements are.  Also, if you are in a community property state I bellieve you will have to count your debt anyway.

[Anonymous]

I don't think he can get the tax credit in any circumstances if you have owned a home in the last 3 years.

Check if you live in a community property state as that will have an efect on loan qualification.  If you are in one, search the board here as it will explain why that matters.

[SanDiegoEngineer]

If you file taxes seperately, he can claim half the tax credit.  Since he's not on the deed to your current house, and it was purchased before you married him, only you are disqualified from claiming the first time homebuyer's credit.

[Anonymous]

Are you living in the house? Has it been your primary residence within the past 3 years?

The rules don't say you can't have owned a home, period. They say that you can't have owned a principal residence. That means that if you own vacation or rental property, but rent your primary residence, that you may qualify for the credit. (I would definitely seek the advice of a reliable tax accountant.)

The test of whether a property is your primary residence includes: Is it the one you use for your driver's license and auto registration? Is it the one you use when filing your taxes? (There are other items as well.)

[Anonymous]

The tax-credit rules require that, if married, both spouses be named on the loan. If either has owned a home, neither qualifies. Thus, it appears you are out of luck.

However, please check with a tax professional. I'm not -- I'm just a pretty good reader.

http://www.federalhousingtaxcredit.com/2009/faq.php#1

Message Edited by oldhack62 on 04-19-2009 01:08 PM

[Anonymous]

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http://www.federalhousingtaxcredit.com/2009/faq.php#1

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Just discovered the link doesn't work. Sorry. However, if you highlight, then copy/paste into a new browser window, it seems to.

 

[baby_isis]

Thank you for your responses- I see what the fed house tax credit site says regarding the definition.  The crazy thing is that the HUD website states that a 1st time homebuyer can be:

An individual who has had no ownership in a principal residence during the 3-year period ending on the date of purchase of the property. This includes a spouse (if either meets the above test, they are considered first-time homebuyers.)

 and

single parent who has only owned with a former spouse while married.

Now I owned the house with my former spouse, and took possession of it after our divorce, and never have purchased another home.  So I guess I'm to assume that, even though HUD defines it differently, the requirements are set up different for the credit?   I'm guessing that we can still use 1st time homebuyer program under the definition of HUD, but just may not be able to take advantage of the credit....

URL for HUD definition: http://www.hud.gov/offices/hsg/sfh/ref/sfhp3-02.cfm