FHA’s Lowering of MIP Has Had Little Effect on Minority and First-Time Buyer Share

first_img The Best Markets For Residential Property Investors 2 days ago  Print This Post Sign up for DS News Daily Brian Honea’s writing and editing career spans nearly two decades across many forms of media. He served as sports editor for two suburban newspaper chains in the DFW area and has freelanced for such publications as the Yahoo! Contributor Network, Dallas Home Improvement magazine, and the Dallas Morning News. He has written four non-fiction sports books, the latest of which, The Life of Coach Chuck Curtis, was published by the TCU Press in December 2014. A lifelong Texan, Brian received his master’s degree from Amberton University in Garland. Home / Daily Dose / FHA’s Lowering of MIP Has Had Little Effect on Minority and First-Time Buyer Share The Federal Housing Administration (FHA)’s lowering of the annual mortgage insurance premium by 50 basis points in January was intended to expand access to credit and make it easier for minority borrowers and first-time homebuyers to enter the market.The move was widely praised by the Obama Administration as a path to homeownership but at the same time it was highly controversial because it was made only two months after HUD reported to Congress in November 2014 that the FHA’s Mutual Mortgage Insurance Fund’s capital ratio was at 0.41 percent (less than one-fourth of the 2 percent required by law).Half a year after the FHA’s lowering of the mortgage insurance premiums, is this move a step toward achieving the goal of enticing more minorities and first-time buyers into the housing market or has it simply increased the government’s role in housing finance?Recent research by Washington, D.C.-based think tank American Action Forum (AAF) showed that as of the end of May, the share of FHA endorsements for both minority borrowers and first-time homebuyers was unchanged from a year earlier–33 percent for minority borrowers and 83 percent for first-time buyers. In fact, in its most recent quarterly report to Congress, FHA revised its subsidy rate downward from -9 percent to -5 percent, according to Andy Winkler, Director of Housing Finance Policy at AAF.”A negative subsidy rate indicates that the government stands to make a paper profit from the loan guarantees under current federal credit accounting rules,” Winkler said. “Yet FHA has a long history of overestimating the value of its Mutual Mortgage Insurance Fund and this time appears no different.”Another of the effects of the lowering of FHA’s mortgage premiums is that the distribution of FHA endorsements is shifting toward higher credit score borrowers and toward more expensive loans. According to AAF, the share of new FHA endorsements with credit scores higher than 680 increased from 41 percent in Q4 2014 up to 45 percent in Q1 2015, after the premiums were lowered. The FHFA’s competitive pricing for this group of borrowers is pushing private companies out of the mix, according to Winkler.From Q4 2014 to Q2 2015, the share of FHA loans with balances of less than $150,000 dropped from 48 percent to 43 percent, indicating that the distribution of new FHA endorsements is shifting toward higher loan amounts. According to Winkler, the loans with higher balances “add further risk to FHA’s still-recovering balance sheet and likely do not help those ‘locked out’ of home buying.”In January when the premium reduction was announced, Auction.com EVP and housing expert Rick Sharga said a likely effect of lowering the premium would be a slight increase in FHA’s share of loan volume, “as their offerings will now be competitive versus conventional loans, especially for sub-729 FICO score borrowers.” AAF cited a report from Inside Mortgage Finance which found that FHA originations increased by 5.5 percent from Q4 2014 to Q1 2015, which gave them a 32 percent share of the market. AAF’s research indicates the government’s role in mortgage finance is increasing despite National Economic Council housing policy adviser and former counselor to the Secretary of Treasury for Housing Finance Policy Michael Stegman’s declaration last year that “There is no sound policy reason for the government to support the overwhelming majority of mortgage credit extended in this country when there is sufficient private capital able to responsibly bear this risk.”AAF also noted that prepayments, which include full payoffs and FHA refinances, have spiked by 163 percent year-over-year for the five-month period from January 1 t0 May 31, 2015 (from $40,000 up to nearly $88,000). Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Share Save in Daily Dose, Featured, Government, News Servicers Navigate the Post-Pandemic World 2 days ago Tagged with: Federal Housing Administration FHA First-Time Homebuyers Housing Market Minority Homebuyers Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Data Provider Black Knight to Acquire Top of Mind 2 days ago Related Articlescenter_img About Author: Brian Honea Servicers Navigate the Post-Pandemic World 2 days ago Demand Propels Home Prices Upward 2 days ago FHA’s Lowering of MIP Has Had Little Effect on Minority and First-Time Buyer Share The Week Ahead: Nearing the Forbearance Exit 2 days ago August 13, 2015 1,193 Views The Best Markets For Residential Property Investors 2 days ago Demand Propels Home Prices Upward 2 days ago Previous: Ginnie Mae Sets Record for Monthly Mortgage-Backed Securities Issuance Next: Zillow Promotes New Chief Economist Federal Housing Administration FHA First-Time Homebuyers Housing Market Minority Homebuyers 2015-08-13 Brian Honea Data Provider Black Knight to Acquire Top of Mind 2 days ago Subscribelast_img read more

Fannie Mae: Is Government’s Definition of ‘Affordability’ Accurate?

first_imgHome / Daily Dose / Fannie Mae: Is Government’s Definition of ‘Affordability’ Accurate? Data Provider Black Knight to Acquire Top of Mind 2 days ago Subscribe The Best Markets For Residential Property Investors 2 days ago Share Save Governmental Measures Target Expanded Access to Affordable Housing 2 days ago About Author: Scott Morgan Scott Morgan is a multi-award-winning journalist and editor based out of Texas. During his 11 years as a newspaper journalist, he wrote more than 4,000 published pieces. He’s been recognized for his work since 2001, and his creative writing continues to win acclaim from readers and fellow writers alike. He is also a creative writing teacher and the author of several books, from short fiction to written works about writing. According to the U.S. Census Bureau, nearly a third of American households, owned or rented, experienced affordability problems in 2014. Fannie Mae, however, would like to challenge.The U.S. Census Bureau’s American Community Survey (ACS) found that more than 18 million homeowner households and more than 20 million renter households experienced housing affordability problems last year, with renters suffering more consistently high “cost burden” issues than owners.A household is considered cost burdened if it spends more than 30 percent of its gross income on housing costs. According to the Census, there were about 115 million households in the United States between 2009 and 2014.“These are big numbers that demand our attention,” said Nuno Mota, an economist at Fannie Mae. “However, considering that there are a number of affordability metrics currently used throughout the industry, are these numbers providing the most accurate view of the overall affordability picture, or are we only getting a partial view?”To get better answers, Fannie has launched the Housing Affordability Primer, which contrasts five common housing affordability metrics used in the industry: Housing cost-to-income ratios; researcher N.K. Kutty’s residual income approach; and the home purchase affordability indicators of the National Association of Realtors, the California Association of Realtors, and the National Association of Home Builders.“No single measure can give us a complete view of the matter.” Nuno Mota, Economist, Fannie MaeThe purpose of the primer is to give Fannie Mae insight into which indicators may offer the best insight for different facets of housing affordability. And that plural on “indicators” is emphasized repeatedly in the primer.“No single measure can give us a complete view of the matter,” Mota said.For example, the residual income approach deems that a household faces an affordability problem if the monthly income left over after covering all housing costs is less than the amount necessary to purchase a minimum level of non-housing-related items. But Kutty defines minimum non-housing consumption as two-thirds of the U.S. Census Bureau’s poverty threshold.“Although both metrics indicate consistently higher rates of affordability problems for renters than for homeowners, the residual income metric estimates markedly fewer affected households than the traditional cost burden measure, regardless of tenure status,” he said. “In 2014 the traditional cost burden measure indicated that some 9 million more renter households and 11 million more homeowner households faced affordability challenges than the residual income metric.”While Fannie Mae has no answers so far, the agency feels better prepared to find them.“A comprehensive understanding of housing affordability’s multiple measures is essential for an informed discussion on the issue,” Mota said. The Best Markets For Residential Property Investors 2 days ago Demand Propels Home Prices Upward 2 days ago Fannie Mae: Is Government’s Definition of ‘Affordability’ Accurate?  Print This Post Servicers Navigate the Post-Pandemic World 2 days ago Demand Propels Home Prices Upward 2 days ago Sign up for DS News Daily Data Provider Black Knight to Acquire Top of Mind 2 days ago Previous: DS News Webcast: Thursday 11/12/2015 Next: Nationstar Becomes the Latest Servicer to Settle Over ‘Force Placed Insurance’ The Week Ahead: Nearing the Forbearance Exit 2 days ago Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago November 12, 2015 1,421 Views Fannie Mae Housing Affordability U.S. Housing Market 2015-11-12 Scott Morgan Tagged with: Fannie Mae Housing Affordability U.S. Housing Market in Daily Dose, Featured, Market Studies, News Related Articleslast_img read more

Do Declining Oil Prices Affect Homeownership?

first_img About Author: Xhevrije West Tagged with: Oil Prices Pro Teck U.S. Housing Market Demand Propels Home Prices Upward 2 days ago The Best Markets For Residential Property Investors 2 days ago Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Data Provider Black Knight to Acquire Top of Mind 2 days ago The Week Ahead: Nearing the Forbearance Exit 2 days ago Share Save Home / Daily Dose / Do Declining Oil Prices Affect Homeownership?  Print This Post Related Articles The Best Markets For Residential Property Investors 2 days ago Oil Prices Pro Teck U.S. Housing Market 2016-01-26 Brian Honea Xhevrije West is a talented writer and editor based in Dallas, Texas. She has worked for a number of publications including The Syracuse New Times, Dallas Flow Magazine, and Bellwethr Magazine. She completed her Bachelors at Alcorn State University and went on to complete her Masters at Syracuse University. center_img in Daily Dose, Featured, Market Studies, News Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Sign up for DS News Daily Servicers Navigate the Post-Pandemic World 2 days ago Data Provider Black Knight to Acquire Top of Mind 2 days ago As oil prices continue to decline in the U.S., many in the mortgage industry are expressing concern about how America’s new crisis will affect the housing sector.ProTeck Valuation Services released its Home Value Forecast Tuesday, which explains how U.S. oil prices will affect the housing market, particularly home values.“Many of us are enjoying the benefits of oil at its lowest price in over 12 years, in the $30 a barrel range as of this release,” said Tom O’Grady, CEO of Pro Teck Valuation Services. “The impact on the U.S. oil industry, however, has been alarming.”To provide a clearer picture of the oil crisis, ProTeck explained that at the end of December 2014, there were 1,882 active oil rigs in the U.S.  Just a year later, that number has fallen to 714. In the state of Texas alone, the rig count dropped by more than 62 percent in 2015.A report from Capital Economics found that there are two ways that lower oil prices can affect the economy, but ultimately feels that the decline in oil prices will boost economic growth.“In principle, a lower oil price should be positive for the world economy. The transfer of income from producers to consumers, who are more likely to spend on other goods and services, should boost global demand,” Capital Economics stated. “At worst, the impact might be expected to be neutral, with the winners offsetting the losers. In practice, though, the net impact of the recent slump in oil prices appears to have been negative or at least perceived as such in financial markets.”The report continued, “On balance, then we continue to expect an extended period of lower oil prices to boost global growth over the next few years, even if this process may take longer than we had anticipated.”Perhaps the most interesting connection between oil prices and housing was recently made by Bloomberg Business writer Tracy Alloway and Bank of America analysts.Alloway reports that one year ago, Bank of America connected the subprime mortgage crash with low oil prices. So could this oil crisis be the first sign of a subprime mortgage crash?Bloomberg reports that Bank of America analysts recently said this about the oil prices and subprime crisis relationship:The pattern of the decline in the price of oil that began in mid-2014 is remarkably similar to the 2007-2009 pattern of the price decline of ABX, the credit derivative index that referenced subprime mortgages and, ultimately, the U.S. housing market. Given that both housing and oil prices were fueled to spectacular heights in the two periods by massive credit expansion, it’s probably more than just coincidence that the respective “bubble” bursting patterns are so similar.Consider how things tend to work. Denial on what constitutes fair value is a big component of bubbles, on the part of both market participants and policymakers. When perceived “bubbles” burst, markets take their time in steadily shredding views of the perception of fundamental value, as prices move lower and lower. Along the way, many will cite “technical factors” as the cause of the decline, which in some way suggests the price decline may not be real when in fact it is all too real. In the end, the technicals drive the fundamentals, as credit flees and borrowers go bust, and a feedback loop lower kicks in. Lower prices beget accelerated selling, as asset owners need to raise cash. It could be margin calls or it could be producer selling needs, it doesn’t really matter: the selling becomes inevitable and turns into forced selling. Do Declining Oil Prices Affect Homeownership? Servicers Navigate the Post-Pandemic World 2 days ago January 26, 2016 2,140 Views Previous: Tech Talk: How TRID Changed the Game Next: DS News Webcast: Wednesday 1/27/2016 Demand Propels Home Prices Upward 2 days ago Subscribelast_img read more

The Week Ahead: Bank of America Reports Earnings

first_imgHome / Daily Dose / The Week Ahead: Bank of America Reports Earnings in Daily Dose, Featured, News Previous: OwnAmerica Attracts 1.8 Million SFR Properties in First Month Next: Mortgage Production Contributes to BOA’s Strong Q3 Earnings Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Sign up for DS News Daily Kendall Baer is a Baylor University graduate with a degree in news editorial journalism and a minor in marketing. She is fluent in both English and Italian, and studied abroad in Florence, Italy. Apart from her work as a journalist, she has also managed professional associations such as Association of Corporate Counsel, Commercial Real Estate Women, American Immigration Lawyers Association, and Project Management Institute for Association Management Consultants in Houston, Texas. Born and raised in Texas, Baer now works as the online editor for DS News. The Week Ahead: Nearing the Forbearance Exit 2 days ago The Best Markets For Residential Property Investors 2 days ago Subscribe Data Provider Black Knight to Acquire Top of Mind 2 days ago Bank of America the week ahead 2016-10-16 Kendall Baer Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Demand Propels Home Prices Upward 2 days ago Demand Propels Home Prices Upward 2 days agocenter_img Tagged with: Bank of America the week ahead Servicers Navigate the Post-Pandemic World 2 days ago Related Articles Share Save Data Provider Black Knight to Acquire Top of Mind 2 days ago The Week Ahead: Bank of America Reports Earnings October 16, 2016 1,046 Views Mortgage production was up for Bank of America in Q2 despite a drop in mortgage income during the quarter as well as a substantial overall drop in profits, according to Bank of America’s second quarter 2016 earnings statement.Net income for Bank of America in Q2 was $4.2 billion ($0.36 per share), down from $5.1 billion ($0.43 per share) in the year-ago quarter. The mortgage production portion of the consumer banking segment grew by 8 percent up to $20.6 billion during the second quarter.Mortgage production includes first mortgage and home equity originations; the amount represents unpaid principal balance in the case of loans and the principal amount of the total line of credit in the case of home equity originations.The noninterest income portion of consumer banking dropped over-the-year from $2.71 billion down to $2.58 billion due to lower mortgage banking income, lower service charges, and the impact of certain divestiture, according to the report. The mortgage banking income in particular took a hit in Q2, falling over-the-year from $639 million in Q2 2015 all the way down to $44 million in Q2 2016 (it was $242 million in Q1 2016).Bank of America’s Chief Financial Officer, Paul Donofrio, said there were four items that caused the year-over-year decline in net income for the bank as well as the drop in mortgage banking income.“First, we sold an appraisal business last year, so there was revenue in last year’s second quarter that isn’t in this quarter,” Donofrio said. “Second, we had some servicing sales in the second quarter of last year for a gain that we didn’t have this quarter.”What will Bank of America’s earnings hold for Q3? Find out on Monday, October 17th at 8:30 A.M. EST.Thursday, October 20—Existing-Home Sales for September 2016, NARThe National Association of Realtors (NAR) reported a decline in the pace of existing-home sales for the second consecutive month in August, down to an annual rate of 5.33 million. The industry will see how existing-home sales fared in September when the NAR publishes the September 2016 report on Thursday, October 20.With affordability being a concern in some markets because of price appreciation outpacing wage growth and job gains, on the surface it seems like existing-home sales are down after hitting a post-crisis peak in June.But when compared with historical averages, things don’t look so bad for existing-home sales, according to NAR’s August 2016 EHS Over Ten Years report. The report showed that the total number of homes sold nationwide in August 2016 was higher than the 10-year August average, as was the total number of homes in all four regions.“Comparing August of 2006 to August of 2016 fewer homes were sold in 2016 in the US and all regions, the Northeast enduring the biggest decline of 51.4 percent,” said Michael Hyman of NAR. “The U.S. had a drop of 18.9 percent while the West had the smallest drop in sales at 8.3 percent over the 10-year period.”This week’s scheduleMonday, October 17Bank of America Q3 earnings reportTuesday, October 18Goldman Sachs Q3 earnings reportComerica Q3 earnings reportHousing Market Index for October 2016, National Association of Homebuilders, 10 a.m. ESTWednesday, October 19Morgan Stanley Q3 earnings reportU.S. Bancorp Q3 earnings reportHousing Starts for September 2016, HUD/Census Bureau, 8:30 a.m. ESTThursday, October 20BNY Mellon Q3 earnings reportExisting-Home Sales for September 2016, National Association of Realtors, 10 a.m. ESTFriday, October 21SunTrust Q3 earnings report The Best Markets For Residential Property Investors 2 days ago  Print This Post About Author: Kendall Baer Servicers Navigate the Post-Pandemic World 2 days agolast_img read more

Roadblocks Ahead for Credit Union Legislation

first_img Servicers Navigate the Post-Pandemic World 2 days ago in Daily Dose, Featured, Government, Headlines, News Tagged with: H.R. 3736 NAFCU Servicers Navigate the Post-Pandemic World 2 days ago About Author: Joey Pizzolato Share Save Sign up for DS News Daily Previous: Bringing Fintech to the Forefront Next: A New Beginning for FHA With Brian Montgomery at the Helm Home / Daily Dose / Roadblocks Ahead for Credit Union Legislation Demand Propels Home Prices Upward 2 days ago  Print This Post Data Provider Black Knight to Acquire Top of Mind 2 days ago Related Articles Demand Propels Home Prices Upward 2 days agocenter_img Data Provider Black Knight to Acquire Top of Mind 2 days ago Governmental Measures Target Expanded Access to Affordable Housing 2 days ago The Best Markets For Residential Property Investors 2 days ago Roadblocks Ahead for Credit Union Legislation Joey Pizzolato is the Online Editor of DS News and MReport. He is a graduate of Spalding University, where he holds a holds an MFA in Writing as well as DePaul University, where he received a B.A. in English. His fiction and nonfiction have been published in a variety of print and online journals and magazines. To contact Pizzolato, email [email protected] The Week Ahead: Nearing the Forbearance Exit 2 days ago Governmental Measures Target Expanded Access to Affordable Housing 2 days ago The National Association of Federally-Insured Credit Unions (NAFCU), with the support of Representative Bill Posey (R-Florida) and Denny Heck (D-Washington) reintroduced a bill that would require the National Credit Union Association (NCUA) to initiate a study on capital requirements for credit unions before finalizing the final risk-based capital (RCB) rule that is scheduled to go into effect on the first of January 2019.Regulatory burdens and costs associated with the NCUA ruling are one of the primary concerns of the RCB rule, according to the NACU.”NAFCU thanks Reps. Posey and Heck for reintroducing this important legislation that would help ensure that the NCUA, credit unions, Congress and others fully understand and comprehend the impacts this rule making will have on the industry,” said NAFCU Vice President of Legislative Affairs Brad Thaler. “Requiring further study of this rule will only benefit the credit union industry and ensure a fair and appropriate risk-based capital system is put into place.”The Risk Based Capital Study Act—officially designated H.R. 3736, would require the study to examine the following criteria: the agencies authority to issue a two-tier proposal, the ways in which RBC compares to banking requirements, the impact on credit unions capital cushions, and an explanation on the ways risks are weighted by the agency.If passed, the bill would delay the RBC rule 120 until after the report is reviewed by Congress, and allow greater capital resources for credit unions.You can read the full press release by the NAFCU here. The Best Markets For Residential Property Investors 2 days ago Subscribe H.R. 3736 NAFCU 2017-09-12 Joey Pizzolato September 12, 2017 1,238 Views last_img read more

Taxing Issues in the World of Real Estate Investors

first_imgHome / Commentary / Taxing Issues in the World of Real Estate Investors Servicers Navigate the Post-Pandemic World 2 days ago Governmental Measures Target Expanded Access to Affordable Housing 2 days ago The Best Markets For Residential Property Investors 2 days ago April 17, 2019 5,270 Views Previous: Altisource’s Premium Title Launches HomeVal Next: JPMorgan Reshapes Executive Team Heath Silverman is the co-founder and CEO of Stessa. Stessa gives the millions of real estate investors with single-family rentals and multifamily buildings a powerful new way to track, manage, and communicate the performance of their real estate assets for free. A real estate investor for nearly 20 years with 60+ rental units across the country, Heath is incredibly passionate about the rental property industry and loves helping other people succeed at investing in real estate. Since the introduction of the Tax Cuts & Jobs Act in 2017, many real estate investors have wondered how these new rules and incentives affect their taxes. Things were so confusing in fact that the IRS recently released clarification on the 20 percent pass-through deduction, and specifically singled-out real estate investments as needing more clarity. To answer some of these questions, I sat down with Brandon Hall, CEO and founder at The Real Estate CPA.Heath Silverman (CEO, Stessa): Welcome, Brandon, I’d like to start with a quick question about the basics. What are the key things that all real estate investors should be doing in preparation for taxes?Brandon Hall (CEO, The Real Estate CPA): Thanks, Heath, for the opportunity to talk about my favorite subject. The basics of real estate investing taxes are quite simple—organization and preparation. This means diligent and digital record keeping, having a home office, having the right corporate structure to protect you and your business, and wrapping your head around common tax misunderstandings such as how travel works as a business expense.Silverman: In the same vein, what are the common misunderstandings about travel? Because, as real estate investors, we are doing this on a regular basis and typically need to do so to scale our business.Hall: In general, business travel must be considered both “ordinary and necessary” to be tax-deductible. Ordinary means it is common and accepted within the trade or business. Necessary means it is helpful and appropriate for the trade or business. As a real estate investor, you’ll likely travel to and from your rental properties, other business locations, new markets, and education-related events. While most of these activities are ordinary and necessary, it is important to understand the various rules for deducting travel expenses.For local travel, you have a home or local office, and these miles driven are considered business miles and are tax deductible within your “tax home.” Your “tax home” is considered the geographic location (i.e. city or locality) where you have an established rental business. There are generally two ways you can deduct these trips: 1) using the actual expense method, or 2) the standard mileage deduction. Both require you to keep an IRS-compliant mileage log.Travel expenses incurred to research and evaluate any new property that you eventually purchase outside of your tax home, will be added to the basis of the property and depreciated over 27.5 years, according to Revenue Ruling 77-254 of the U.S. tax code. Once you purchase a rental property in the new geographic area, additional new travel to the same area to evaluate other potential acquisitions becomes tax deductible as a business expense.That said, it’s worth noting that all real estate investors should have a trusted accountant with which to discuss their specific situation.Silverman: Let’s dive into real estate tax strategies and incentives. What are some of those strategies that you see investors missing on a regular basis?Hall: Let’s start with date placed in service. When you first purchase a rental property, it will be considered “placed in service” on day one if there’s an existing tenant in the property. If there’s no existing tenant, then the property is assumed to be not yet in service. Rental property investors will sometimes purchase a property vacant and in need of significant renovations. Any renovation costs incurred before you place the property in service must be capitalized and depreciated, rather than deducted as an expense that tax year. The way to successfully manage this distinction from a tax perspective is to complete the minimum amount of work necessary to get the property ready for lease, then immediately advertise it for rent.The key here is that the property is “ready” and “available” for rent in order to be placed into service. “Available” means advertising the unit for rent whereas “ready” means habitable. Be sure to check your local ordinances on whether you need a certificate of occupancy as that will be required before your unit will be deemed “ready” for rent. Once the property is in service you can finish the renovation and deduct some of the costs as repair and maintenance expenses in the current year.Another strategy is passive losses versus income, and how to treat these. This is a much larger discussion, but under the passive activity limits you can deduct up to $25,000 in passive losses against your ordinary income (e.g. W-2 wages) if your modified adjusted gross income (MAGI) is $100,000 or less. For example, your MAGI is $100,000 for the year and your rental properties produce a net loss of $30,000. As long as you demonstrate active participation and own at least 10% of the value of all the interests in your rental activities you’ll be able to deduct $25,000 of this loss against your ordinary income. The remaining $5,000 will be carried forward. A final strategy I will mention here is when selling properties, there are several strategies real estate investors need to explore before making any decision to minimize their tax burden—1031 exchanges, tax loss harvesting, and opportunity-zone investing. If you aren’t aware of these incentives, please go read up on them and ask your accountant.Silverman: We’d be remiss if we didn’t discuss the new 20% pass-through deduction that the IRS recently clarified. How does this work and what should real estate investors know?Hall: The Tax Cuts & Jobs Act of 2017 introduced a new 20 percent pass-through deduction allowing certain business owners to deduct 20 percent of qualified business income if your taxable income is below $157,500 if single, or $315,000 if married.So, if you still have taxable income from your rental properties after following the strategies I mentioned above, you may qualify for the 20 percent pass-through deduction under the following safe harbor. The safe harbor focuses on when a “rental real estate enterprise” will qualify as a “trade or business.” A rental real estate enterprise is an interest in real property owned by an individual, disregarded entity, partnership (other than a publicly traded partnership), or S-Corporation. The safe harbor will apply only to interests in a rental real estate enterprise as long as all of the following conditions are met:Separate books and records are maintained to reflect income and expenses for each rental real estate activity or enterprise (a separate real estate enterprise may constitute multiple properties as long as it is all commercial or all residential). 250-plus hours of rental services are performed for the enterprise.You maintain contemporaneous records, including time reports or similar documents, regarding: a) hours of all services performed, b) description of all services performed, c) dates on which such services are performed, and d) who performed the services.Keep in mind that if you plan on taking this deduction, there are many other things to consider, like you’ll have to issue Form 1099 for all independent contractors to which you paid over $600 during the year. Tagged with: Real Estate Investment taxes Related Articles Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Data Provider Black Knight to Acquire Top of Mind 2 days ago Share Save Demand Propels Home Prices Upward 2 days agocenter_img About Author: Heath Silverman Taxing Issues in the World of Real Estate Investors The Best Markets For Residential Property Investors 2 days ago  Print This Post Real Estate Investment taxes 2019-04-17 David Wharton The Week Ahead: Nearing the Forbearance Exit 2 days ago Data Provider Black Knight to Acquire Top of Mind 2 days ago Demand Propels Home Prices Upward 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago in Commentary, Daily Dose, Featured, Investment, Journal, News Subscribe Sign up for DS News Daily last_img read more

Homeowners in Texas Hit Hardest by Natural Disasters

first_img Mike Albanese is a reporter for DS News and MReport. He is a University of Alabama graduate with a degree in journalism and a minor in communications. He has worked for publications—both print and online—covering numerous beats. A Connecticut native, Albanese currently resides in Lewisville.  Print This Post June 16, 2020 1,446 Views Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Tagged with: housing market 2020 Natural Disasters Servicers Navigate the Post-Pandemic World 2 days ago Home / Daily Dose / Homeowners in Texas Hit Hardest by Natural Disasters Share Save A new report by ValuePenguin found that homeowners in Texas were hit hardest by natural disasters, with annual costs averaging $1,478 per household over the last five years.Additionally, the report found 10 states paid for more than 80% of the cost of natural disasters across the nation, with the damage concentrated along the Gulf Coast.The report added that there were $14.1 billion in statewide annual property damage due to natural disasters. ValuePenguin said 2017 accounted for $63.4 billion in damage, mostly due to Hurricane Harvey. Texas also had the most deaths over this five-year period, with 321 weather-related deaths.Following Texas, homeowners in Louisiana paid $1,078 in weather-related damages. Florida was a distant third at $451, followed by California ($319); Colorado ($220); North Carolina ($153); Michigan ($150); New Mexico ($119); Nebraska ($115); and Georgia ($112). Th national average is $104 annually.California recorded $4.14 billion in statewide annual property damage due to natural disasters. The Golden State also had the most FEMA-declared disasters of any state—16.4 between 2016 and 2018.ValuePenguin projects that 2020 is on track to have the most FEMA-recognized disaster in history. There have been 180 disasters declared through the end of May, with 154 related to COVID-19.“While the full cost of the coronavirus will be impossible to determine until the virus is under control, it will no doubt be among the costliest disasters in U.S. history,” the report said.Peak disaster season has yet to arrive, as 51% of the total number of disasters between 1998 and 2019 occurred between June and August.A recent report by CoreLogic found that the 2020 hurricane season could harm more than 7 million properties from a storm surge this year. This brings a potential of $1.7 trillion in reconstruction costs for single-family homes and $95 billion for multi-family residences.These figures assume total destruction of all properties facing the threat of a storm surge in the worst-case scenario of a Category 5 hurricane in their area.The National Oceanic and Atmospheric Administration (NOAA) says this hurricane season has a 60% chance of being “above-normal.”NOAA predicts between 13 and 19 named storms, between six and 10 hurricanes, and between three and six major hurricanes this year. Homeowners in Texas Hit Hardest by Natural Disasters Sign up for DS News Daily The Best Markets For Residential Property Investors 2 days ago Related Articles Governmental Measures Target Expanded Access to Affordable Housing 2 days agocenter_img Data Provider Black Knight to Acquire Top of Mind 2 days ago The Week Ahead: Nearing the Forbearance Exit 2 days ago Previous: Understanding the Causes of Mortgage Credit Tightening Next: Fed Chair: Purchase of MBS ‘Vital’ For Market Function Subscribe Data Provider Black Knight to Acquire Top of Mind 2 days ago About Author: Mike Albanese in Daily Dose, Featured, News Servicers Navigate the Post-Pandemic World 2 days ago Demand Propels Home Prices Upward 2 days ago The Best Markets For Residential Property Investors 2 days ago Demand Propels Home Prices Upward 2 days ago housing market 2020 Natural Disasters 2020-06-16 Mike Albaneselast_img read more

Teenager dies following overnight crash near Drumkeen

first_img Calls for maternity restrictions to be lifted at LUH Teenager dies following overnight crash near Drumkeen Guidelines for reopening of hospitality sector published Twitter A teenager from Drumkeen has died in Letterkenny General Hospital following an overnight crash on the main N13 Letterkenny to Ballybofey Road.The 18-year-old man was the sole occupant in one of the cars which was involved in the head-on collision involving two vehicles near Drumkeen just before midnight.He was taken to Letterkenny General Hospital where he passed away this afternoon.Two other people also involved in the crash, a 38-year-old man and a 23-year-old woman suffered multiple fractures, but their injuries are not believed to be life threatening.The road from Drumkeen to the Kilross junction near Stranorlar was closed to facilitate a technical examination by Gardai but has since reopened. Google+ Facebook Pinterest WhatsApp By News Highland – July 12, 2012 RELATED ARTICLESMORE FROM AUTHOR Twittercenter_img Google+ Previous articleTwo former hotel workers cleared of murder of Michaela McAreaveyNext articleCouncil introduces short term free carparking in Buncrana News Highland WhatsApp News NPHET ‘positive’ on easing restrictions – Donnelly Facebook Three factors driving Donegal housing market – Robinson Pinterest 448 new cases of Covid 19 reported today Help sought in search for missing 27 year old in Letterkenny last_img read more

Gardai pledge to address “unsavoury activity” around Leck Cemetrey

first_img Facebook It’s emerged that gardai are investigating a number of incidents in thevicinity of Leck Cemetery in recent weeks following complaints from local residents.There have already been behind the scenes discussions between local councillors and Superintendent Vincent O’Brien about the incidents, and today, the issue has come to the fore as a result of a photograph of a grave and memorial which has been hung on the cemetery gates.Cllr Dessie Larkin, who raised problems at Leck last week says this is symptomatic of a deeper problem, and he’s hoping the public discussion will help stop it:[podcast]http://www.highlandradio.com/wp-content/uploads/2012/07/dlark530.mp3[/podcast] Google+ Twitter Facebook LUH system challenged by however, work to reduce risk to patients ongoing – Dr Hamilton Google+ Pinterest Guidelines for reopening of hospitality sector published WhatsApp Need for issues with Mica redress scheme to be addressed raised in Seanad also Pinterestcenter_img Almost 10,000 appointments cancelled in Saolta Hospital Group this week By News Highland – July 17, 2012 WhatsApp RELATED ARTICLESMORE FROM AUTHOR Business Matters Ep 45 – Boyd Robinson, Annette Houston & Michael Margey News Gardai pledge to address “unsavoury activity” around Leck Cemetrey Previous articleMick McGinley’s Persona Digital Telephony wins mobile phone license challengeNext articleGovernment confirms new Letterkennny Courthouse as part of stimulus package News Highland Twitter Calls for maternity restrictions to be lifted at LUH last_img read more

Locals reject Moville Sewage Scheme investigation appointee

first_img Pinterest Twitter Facebook RELATED ARTICLESMORE FROM AUTHOR Twitter Dail to vote later on extending emergency Covid powers Newsx Adverts PSNI and Gardai urged to investigate Adams’ claims he sheltered on-the-run suspect in Donegal Man arrested on suspicion of drugs and criminal property offences in Derry Facebook WhatsApp By News Highland – July 7, 2011 center_img Google+ Man arrested in Derry on suspicion of drugs and criminal property offences released Previous articleInquest hears how Strabane man died after eating cocaineNext articleLKG manager: Hospital a victim of its own success News Highland The saga of the Moville Greencastle Sewerage Scheme has taken another twist following the withdrawal of a consultant hired to investigate the location of a controversial waste water treatment plant.Last November, the local Electoral Area Committee agreed to have an investigation into the site and how it was identified.Deputy Padraig Mac Lochlainn says the initiative was to be a partnership arrangement with the local community, but the person appointed to oversee the investigation wasn’t acceptable to local people.Deputy Mac Lochlainn says it’s important that is now addressed:[podcast]http://www.highlandradio.com/wp-content/uploads/2011/07/pod830moville.mp3[/podcast] Dail hears questions over design, funding and operation of Mica redress scheme Google+ Locals reject Moville Sewage Scheme investigation appointee HSE warns of ‘widespread cancellations’ of appointments next week Pinterest WhatsApplast_img read more