Folwell - Housing

by Mary Beth “MB” Schultz

New Home Ownership program added to Folwell Home Loan Programs

FNA has made $80,000 of NRP funds available to folks who want to call Folwell home! $2000 forgivable loans will be available from the Greater Minneapolis Housing Corporation (GMHC), our loan administrator. There are no income or first time buyer restrictions associated with these funds. Call Jenny Camacho, Housing Resource Center-Northwest; 612.588.3033

House Watch

This is a critical time for north Minneapolis. On October 15th there were more than 700 homes in foreclosure in the neighborhoods from Plymouth Avenue North to the northern city limits, from the Parkway to I-94. Most of the foreclosed properties are vacant and there are many more that are empty, for rent, or for sale. Each of these vacant properties is at risk for arson, illegal occupation and vandalism. Please call 911, 311 or our office and report any suspicious activity. If you know of a vacant property without a sign (for rent or sale) let us know. We will track vacant properties anywhere in north Minneapolis and pass the information on to Inspections. They cannot do it all and you are the eyes and ears of your neighborhood. Your help is needed!

Attention: Minneapolis Homeowners with Code Violations

This program serves owner-occupied property owners living in Folwell and other eligible neighborhoods, who have recently received written orders from the City of Minneapolis housing inspectors. To learn more about this program, call 612.378.7985 or www.housingresourcecenter.org.

Home Investment - Good or Bad

Brought to you by: Mary Beth MB Schultz

In today's uncertain world, most of us look to our homes for security and comfort. But with a modest rise in mortgage rates and some market cooling, is home ownership still a good investment?

The answer, according to a recent report from the National Association of Realtors, is yes! David Lereah, the chief economist at NAR indicates the current housing trend is healthy and returning to a normal rate of price growth. 'We don't need to break a record every year for the housing market to be good - in fact, cooling sales are necessary for the long-term health of this vital sector. A modest slowdown in home sales, coupled with improvements in housing inventory, means the market is in the process of normalization. That will help to bring balance between home buyers and sellers, yet sales will remain historically strong.'

This cooling effect is very good news for home buyers and owners. Even with a small increase on 30-year fixed-rate mortgage rates, housing is still very affordable and the current trend helps to keep the housing market at a more sustainable sales pace.

The experts agree that there is no longer such a tight supply. The result is that home prices will rise much closer to long term normal conditions, which is the overall rate of inflation plus a percentage point or two. This helps keep the door open for first time buyers and preserves the investment advantage for home owners. Now, that's good news for everyone.

CAPITAL GAINS and TAXES

It’s January—time to start thinking about taxes again. Here is a summary of the current rules regarding capital gain on personal residences and investment property. Taxation on the two is very different.

Personal Residence

The current rule permits individuals to exclude up to $250,000 of capital gain from taxation, and married couples filing jointly to exclude up to $500,000. Any amount of gain above these limitations would be taxed. The exemption can be taken per transaction. That means that the determination of whether or not the gain will be taxed is made at the time of sale. What the homeowner does next-- buy a more expensive home, buy a less expensive home, or not buy at all--has no impact on the determination. The current rule does have the limitation, however, that the property must have been used as the taxpayer’s principal residence for at least two of the past five years. If that is not the case, it is recommended that the homeowner speak with an accountant to determine what tax implications the sale of their property may have. For full details, see IRS publication 523 “Selling Your Home,” at www.irs.gov/publications.

Income or Investment Property

It’s a different story for investors. When investors sell property, they pay taxes on capital gain. However, it is possible to sell rental property or land and not pay any capital gain taxes. How? Through Internal Revenue Code 1031, which states:

No gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held either for productive use in a trade or business or for investment.

Exchanging property for property allows the tax to be deferred to later years. This gives investors a wide range of investment freedom. IRC 1031 Tax Deferral can range from transactions involving the simple trade of two properties to complex, multi-property exchanges. Contact your financial advisor to determine the exchange strategy that is best suited for your situation.

Folwell Home Loan Programs

Are you buying a home in Folwell Neighborhood? Check out the 1 st Time Home Buyers help with closing costs. How about some new landscaping? Fixing up your bathroom? Call Northwest Housing Resource Center , 612.588.3033 for information about the Folwell Home Loan Programs or to have an application mailed to you. Jenny Camacho will be happy to help you.