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Mango

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Interesting. Thanks for posting it. :clap_1: 

One of the things that has not been used in a long time is sellers concessions, where the seller can pay up to 6% of the mortgage amount in closing costs if putting down 20% or more and 3% for 20% or less down.
This works out nicely to "cash poor" buyers who qualify for a mortgage with their income, have low down payments, and/or want to use the cash for renovations.

Interesting. Thanks for posting it. :clap_1: 
 
One of the things that has not been used in a long time is sellers concessions, where the seller can pay up to 6% of the mortgage amount in closing costs if putting down 20% or more and 3% for 20% or less down. 
This works out nicely to &quot;cash poor&quot; buyers who qualify for a mortgage with their income, have low down payments, and/or want to use the cash for renovations.

goofer

Beach Fanatic

There was a very interesting article on the front page of the Wall ST Journal today regarding donating real estate to a charitable institution.  If I understood the article correctly....you would get a tax deduction and a partial proceed of the gift would be used to buy an annuity that would provide the donor with a lifetime income.  I am not well versed on tax strategies as far as a transaction like this is concerned, but I thought it was interesting.  Unfortunately I don't subscribe to the online WSJ so I apologize for not providing a link to the article. Perhaps someone on the board can provide the link.

There was a very interesting article on the front page of the Wall ST Journal today regarding donating real estate to a charitable institution.  If I understood the article correctly....you would get a tax deduction and a partial proceed of the gift would be used to buy an annuity that would provide the donor with a lifetime income.  I am not well versed on tax strategies as far as a transaction like this is concerned, but I thought it was interesting.  Unfortunately I don&#039;t subscribe to the online WSJ so I apologize for not providing a link to the article. Perhaps someone on the board can provide the link.

SHELLY

[QUOTE=goofer44] Unfortunately I don't subscribe to the online WSJ so I apologize for not providing a link to the article. Perhaps someone on the board can provide the link.[/QUOTE]

I can get the WSJ on-line, but I don't think the link will do any good unless you've got a subscription. Perhaps they'll eventually dump it into the "free" Real Estate area of the on-line WSJ.

Here is a link to a "freebie" WSJ Real Estate article that discussed it back in 2003:  [URL=http://www.realestatejournal.com/buysell/taxesandinsurance/20030916-whitehouse.html]Home Donation Option[/URL] 

The article you talked about is pretty long, but here's some excerpts:

[B]Groups Target Property Owners
In Wake of Real Estate Boom;
Family Donates a Mountaintop[/B]
By JENNIFER S. FORSYTH
August 16, 2006; Page B1

In 1984, Raymond and Eleanor Devereaux paid $100,000 for 11 acres atop a small mountain about 35 miles from San Diego. By last year the property -- with its log home and views of Cleveland National Forest -- was worth $1.3 million.

When it came time to plan their estate, Mr. Devereaux, 90 years old, and Mrs. Devereaux, 84, decided to give their mountaintop retreat to charity. In exchange for donating the property to Consumers Union, the nonprofit publisher of Consumer Reports, they got a $60,000-a-year annuity and the right to live there for the rest of their lives. The deal also helped them avoid some capital-gains taxes, eliminated estate taxes on the property and gave them a federal income-tax deduction. And, of course, they got a free lifetime subscription to the magazine.

The Devereauxs are part of a growing wave of philanthropists looking to avoid or reduce bigger tax bites created by the rapid run-up in real estate values. Nonprofit groups, which once shied away from real-estate donations because they feared getting stuck with swamp land or lacked the expertise to handle complex land transactions, are seizing the opportunity with new marketing programs. Their target: World War II-era property owners finalizing estate planning and baby-boomers who have seen their second-home and other real-estate investments balloon in value.

Charities still turn down many offers of real estate, perhaps as high as 80%, some experts estimate. They are likely to turn down property with environmental problems, that can't be sold quickly or that has multiple owners who aren't in agreement on the donation. If a donor wishes to give property that has a mortgage, typically the charity must be willing to pay off the mortgage, known in the industry as a bargain sale, says Caroline Camougis, co-managing director of Delphi Partners, a New York-based real-estate donation advisory firm.

Property donors generally can deduct the fair-market value as an itemized deduction on their federal income taxes -- amounting to up to 30% of their adjusted gross income. However, any real-property donation of more than $5,000 must have a qualified independent appraisal and if it's worth more than $500,000, the donor must attach the appraisal to their income tax return, says Alan Weiner, a tax partner at the accounting firm of Holtz Rubenstein Reminick LLP, in Melville, N.Y

Charmaine DeNoyer, 73, whose mother died in June at age 94 after a long struggle with colon cancer, wanted to help the American Cancer Society. But donating her condo in Milwaukee to the charity also helped her out of a tax bind, though the idea first seemed ludicrous to her sister. "She said, 'Are you crazy? You're giving it away?"' recalls Ms. DeNoyer.

She owned a condo in Milwaukee, but wanted a larger one. Yet because she had spent several years retired in Florida before returning to care for her sick mother, Ms. DeNoyer could not claim the Milwaukee condo as her primary residence under tax rules.

If the condo had sold for its appraised value of about $106,000 -- up from the $28,000 she paid in 1975 -- Ms. DeNoyer would have owed taxes on capital gains of about $70,000. Under a so-called flexible charitable gift, the American Cancer Society sold the condo and set up an annuity for Ms. DeNoyer of $45,397. The rest -- $60,602 -- was considered a taxable donation that she could claim as a deduction on her federal income taxes. She will be eligible to start drawing from the annuity in 2010, at an annual amount of $9,120. That would be extra income -- in addition to her teacher's pension, her social security and another annuity she set up -- to ensure she'll never be a burden to anyone, she says.

While it's too early to say for sure, James Perlmutter, co-managing director of Delphi, believes the slowing market, particularly for second homes, could lead even more people to opt for a tax break through a charitable donation. "As people are having to lower their asking price in many cases, they may go that route when they aren't getting what they wanted," he says.

<blockquote class="xfBb-quote" data-name="goofer44">Unfortunately I don&#039;t subscribe to the online WSJ so I apologize for not providing a link to the article. Perhaps someone on the board can provide the link.</blockquote> 
I can get the WSJ on-line, but I don&#039;t think the link will do any good unless you&#039;ve got a subscription. Perhaps they&#039;ll eventually dump it into the &quot;free&quot; Real Estate area of the on-line WSJ. 
 
Here is a link to a &quot;freebie&quot; WSJ Real Estate article that discussed it back in 2003: <a href="http://www.realestatejournal.com/buysell/taxesandinsurance/20030916-whitehouse.html" target="_blank" class="link link--external" rel="nofollow ugc noopener">Home Donation Option</a> 
 
The article you talked about is pretty long, but here&#039;s some excerpts: 
 
Groups Target Property Owners 
In Wake of Real Estate Boom; 
Family Donates a Mountaintop 
By JENNIFER S. FORSYTH 
August 16, 2006; Page B1 
 
In 1984, Raymond and Eleanor Devereaux paid $100,000 for 11 acres atop a small mountain about 35 miles from San Diego. By last year the property -- with its log home and views of Cleveland National Forest -- was worth $1.3 million. 
 
When it came time to plan their estate, Mr. Devereaux, 90 years old, and Mrs. Devereaux, 84, decided to give their mountaintop retreat to charity. In exchange for donating the property to Consumers Union, the nonprofit publisher of Consumer Reports, they got a $60,000-a-year annuity and the right to live there for the rest of their lives. The deal also helped them avoid some capital-gains taxes, eliminated estate taxes on the property and gave them a federal income-tax deduction. And, of course, they got a free lifetime subscription to the magazine. 
 
The Devereauxs are part of a growing wave of philanthropists looking to avoid or reduce bigger tax bites created by the rapid run-up in real estate values. Nonprofit groups, which once shied away from real-estate donations because they feared getting stuck with swamp land or lacked the expertise to handle complex land transactions, are seizing the opportunity with new marketing programs. Their target: World War II-era property owners finalizing estate planning and baby-boomers who have seen their second-home and other real-estate investments balloon in value. 
 
Charities still turn down many offers of real estate, perhaps as high as 80%, some experts estimate. They are likely to turn down property with environmental problems, that can&#039;t be sold quickly or that has multiple owners who aren&#039;t in agreement on the donation. If a donor wishes to give property that has a mortgage, typically the charity must be willing to pay off the mortgage, known in the industry as a bargain sale, says Caroline Camougis, co-managing director of Delphi Partners, a New York-based real-estate donation advisory firm. 
 
Property donors generally can deduct the fair-market value as an itemized deduction on their federal income taxes -- amounting to up to 30% of their adjusted gross income. However, any real-property donation of more than $5,000 must have a qualified independent appraisal and if it&#039;s worth more than $500,000, the donor must attach the appraisal to their income tax return, says Alan Weiner, a tax partner at the accounting firm of Holtz Rubenstein Reminick LLP, in Melville, N.Y 
 
Charmaine DeNoyer, 73, whose mother died in June at age 94 after a long struggle with colon cancer, wanted to help the American Cancer Society. But donating her condo in Milwaukee to the charity also helped her out of a tax bind, though the idea first seemed ludicrous to her sister. &quot;She said, &#039;Are you crazy? You&#039;re giving it away?&quot;&#039; recalls Ms. DeNoyer. 
 
She owned a condo in Milwaukee, but wanted a larger one. Yet because she had spent several years retired in Florida before returning to care for her sick mother, Ms. DeNoyer could not claim the Milwaukee condo as her primary residence under tax rules. 
 
If the condo had sold for its appraised value of about $106,000 -- up from the $28,000 she paid in 1975 -- Ms. DeNoyer would have owed taxes on capital gains of about $70,000. Under a so-called flexible charitable gift, the American Cancer Society sold the condo and set up an annuity for Ms. DeNoyer of $45,397. The rest -- $60,602 -- was considered a taxable donation that she could claim as a deduction on her federal income taxes. She will be eligible to start drawing from the annuity in 2010, at an annual amount of $9,120. That would be extra income -- in addition to her teacher&#039;s pension, her social security and another annuity she set up -- to ensure she&#039;ll never be a burden to anyone, she says. 
 
While it&#039;s too early to say for sure, James Perlmutter, co-managing director of Delphi, believes the slowing market, particularly for second homes, could lead even more people to opt for a tax break through a charitable donation. &quot;As people are having to lower their asking price in many cases, they may go that route when they aren&#039;t getting what they wanted,&quot; he says.

spinDrAtl

[QUOTE=Mango]Interesting. Thanks for posting it. :clap_1: 

One of the things that has not been used in a long time is sellers concessions, where the seller can pay up to 6% of the mortgage amount in closing costs if putting down 20% or more and 3% for 20% or less down.
This works out nicely to "cash poor" buyers who qualify for a mortgage with their income, have low down payments, and/or want to use the cash for renovations.[/QUOTE]

On conventional loans, alt A, jumbo's and 2nds, its 2% on any non-owner occupied investment property.  For owner occupied or 2nd homes, it is 3% for 90-95% ltv, 6% for 75-90%, and 9% for less than 75%.

VA and FHA are 6%.

These numbers were taken straight from a lender's credit policy manual.

<blockquote class="xfBb-quote" data-name="Mango">Interesting. Thanks for posting it. :clap_1: 
 
One of the things that has not been used in a long time is sellers concessions, where the seller can pay up to 6% of the mortgage amount in closing costs if putting down 20% or more and 3% for 20% or less down. 
This works out nicely to &quot;cash poor&quot; buyers who qualify for a mortgage with their income, have low down payments, and/or want to use the cash for renovations.</blockquote> 
On conventional loans, alt A, jumbo&#039;s and 2nds, its 2% on any non-owner occupied investment property. For owner occupied or 2nd homes, it is 3% for 90-95% ltv, 6% for 75-90%, and 9% for less than 75%. 
 
VA and FHA are 6%. 
 
These numbers were taken straight from a lender&#039;s credit policy manual.

[QUOTE=spinDrAtl]On conventional loans, alt A, jumbo's and 2nds, its 2% on any non-owner occupied investment property.  For owner occupied or 2nd homes, it is 3% for 90-95% ltv, 6% for 75-90%, and 9% for less than 75%.

VA and FHA are 6%.

These numbers were taken straight from a lender's credit policy manual.[/QUOTE]

Whose manual? Did something change in the past 8 months or so. I have been doing this for 20 years, but out of the loop the last year due to illness.
I am still trying to get used to the new 5 page loan app. :eek: 
The figures I posted were the norm for primary residences for as long as I can remember.

<blockquote class="xfBb-quote" data-name="spinDrAtl">On conventional loans, alt A, jumbo&#039;s and 2nds, its 2% on any non-owner occupied investment property. For owner occupied or 2nd homes, it is 3% for 90-95% ltv, 6% for 75-90%, and 9% for less than 75%. 
 
VA and FHA are 6%. 
 
These numbers were taken straight from a lender&#039;s credit policy manual.</blockquote> 
Whose manual? Did something change in the past 8 months or so. I have been doing this for 20 years, but out of the loop the last year due to illness. 
I am still trying to get used to the new 5 page loan app. 😱 
The figures I posted were the norm for primary residences for as long as I can remember.

I don't know if anything changed and maybe this particular lender has a different policy but it read as if those were the conforming loan rules.  I went back and checked another document based solely on the product and the same things are there for conventional loans.

This is a national wholesale lender that does Freddie Mac LP loans.  They also do Fannie Mae if you submit DU findings from the Fannie Mae website.

I don&#039;t know if anything changed and maybe this particular lender has a different policy but it read as if those were the conforming loan rules. I went back and checked another document based solely on the product and the same things are there for conventional loans. 
 
This is a national wholesale lender that does Freddie Mac LP loans. They also do Fannie Mae if you submit DU findings from the Fannie Mae website.

Thanks.I am linked to both Freddie and Fannie, so I will check it out on web sites.
I haven't seen it used in so long, but assume we will be seeing it a lot more as a way to attract potential buyers.

Thanks.I am linked to both Freddie and Fannie, so I will check it out on web sites. 
I haven&#039;t seen it used in so long, but assume we will be seeing it a lot more as a way to attract potential buyers.

kathydwells

Darlene is my middle name, not my nickname

An Article that might interest some of you. [url="http://abcnews.go.com/GMA/PersonalFinance/story?id=2312643&page=1"]click[/url]

An Article that might interest some of you. <a href="http://abcnews.go.com/GMA/PersonalFinance/story?id=2312643&amp;page=1" target="_blank" class="link link--external" rel="nofollow ugc noopener">click</a>

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