Thursday, January 21, 2010

Do you really own your home to get the 1st time homebuyer Tax Credit?

You might be surpised to learn that you might not - I received a call from a person today having trouble getting the first time homebuyer tax credit.  She got a trailer from a company that owns a Land Lease Community.  She was told that she was buying the trailer and leasing the land.

But as she read her paperwork to me, it became more and more obvious that she was leasing the trailer for 13 years at 14% interest, paying homeowner's insurance, taxes on the trailer and all maintenance.  At the end of the 13 years she could then purchase the trailer for $1. - but until then the deed is in the company name and she does not qualify for the first time homebuyer tax credit.  She does not in fact own the home!

All the paperwork has misleading jargon like "mortgage","mortgage interest", "mortgage principal" and loan.  When all the time it is a glorified lease purchase - but with the poor renter paying all the expenses.

A Land Lease Community is a  housing development in which homeowners lease the land under their homes from a landowner who often provides community infrastructure and amenities as well. The most common such communities are the modern equivalent of the mobile home park, in which owners of Manufactured Homes lease their Sites. Surveys indicate that more than one-third of manufactured homes are located in land lease communities.

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