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June/July 2009

by David Bloom

Reversing the

New Opportunities
for Homeowners
and Home Buyers

The Texas housing market held up well as bubbles burst in other parts of the country. Now, with historically low interest rates and a variety of available tax credits, there’s good news whether you’re looking to buy your first house, make a current one greener or help your golden years shine a bit brighter.

The federal stimulus package contains a number of ways for consumers to increase their purchasing power or make energy-saving home improvements. First-time homebuyers can receive a tax credit of up to $8,000 if they purchase a principal residence between Jan. 1 and Dec. 1, 2009, and stay in the home for at least three years.

Similarly, the Weatherization Assistance Program administered by state and local governments offers homeowners up to $6,500 for making a home airtight with insulation or new windows. If homeowners want to take green to the next level and put solar panels on that new roof, they can get tax credits worth 30 percent of the cost of the total investment.

Ten years ago, the Texas Legislature authorized lenders to make reverse mortgages available in Texas. While they have taken some time to gain traction, in recent years reverse mortgages have become an increasingly attractive option for older Texans who want to tap home equity, pay off existing loans or simply finance their retirement.

Did You Know?

A reverse mortgage is a loan that allows seniors to access their home’s entire equity while continuing to live in the house for the rest of their lives.

The reverse mortgage market grew 23 percent in Texas last year, according to MetLife’s Scott Norman, and is on pace to do $900 million in business in 2009, which would represent 38 percent year-over-year growth. Today, Texas ranks third in the U.S. in its number of reverse mortgages.

“Texas has the best reverse mortgage consumer protections in the country,” Norman says. “In addition to built-in safeguards such as restrictions on rates and fees and cooling-off periods, homeowners are required to receive counseling from an independent counselor.” FN

For more information on a variety of energy-efficient home investments and tax credits, visit the U.S. Department of Energy.

For information on how to qualify for reverse mortgages, or to see a list of common questions about reverse mortgages, visit the Texas Office of Consumer Credit Commissioner.

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