Close It! House of the Week: The 'Lilac House' of Barnaby Woods

We're heading over to Barnaby Woods this week to take a look at a 4-bedroom, 3-bathroom detached home that offers a perfect blend of charm and modern-day convenience. The price was recently reduced, and the house is now listed at $995,000.

Built in 1927, the "Lilac House" has a private "treetop" master suite as well as a spacious yard and garden. The neighborhood is completely residential and abuts Rock Creek Park, offering residents an idyllic home life with the conveniences of living in the District.

Assuming a homebuyer puts down 20 percent on a conventional loan, her cash to close number will be approximately $225,873.72. Monthly payments will then be around $4,355.79 per month. For a complete picture of the cash to close on any property in the D.C. metro area, including the seller's side of the transaction, try the Close It™ Web app or download the free Close It™ iOS app.

FIRPTA withholding rate to increase to 15% for sales exceeding $1 million

FIRPTA withholding rate to increase to 15% for sales exceeding $1 million

Starting February 16, 2016, there will be changes to the Foreign Investment in Real Property Tax Act ("FIRPTA").

FIRPTA is a tax law passed in 1981 that requires foreign persons to pay U.S. income tax on the gains they make from selling U.S. real estate.

The duty is on the U.S. national buyer to deduct and withhold a portion of the sales price and report the sale to the IRS. Buyers can withhold less than the statutory amount if they obtain a determination of the specific amount of tax owed by the foreign national using IRS Form 8288-B.

In most cases, the settlement agent is the party that actually remits the funds to the IRS, but the buyer is held legally responsible. Additionally, until the tax is paid in full, the government obtains a security interest in the real property.

The 10% rate will still apply for those transactions in which the property is to be used by the Buyer as a residence, provided the sales price does not exceed $1,000,000, and the existing $300,000 “exemption” remains unaffected. So here are the new guidelines:

  • If the sales price is $300,000 or less, AND the property will be used by the Buyer as a residence (as provided for in the current regulations), no sums need be withheld or remitted.
  • If the sales price exceeds $300,000 but does not exceed $1,000,000, AND the property will be used by the Buyer as a residence, then the withholding rate is 10% on the full amount realized.
  • If the sales price exceeds $1,000,000, then the withholding rate is 15% on the entire amount, regardless of use by the Transferee.
  • Under the law, the Buyer is the withholding agent and is responsible for withholding and remitting the proper amount to the IRS and could be liable for any additional withholding tax, penalty, and interest if their intent is ever challenged by the IRS.

    The current FAR/BAR contract form contains language specifically referring to a 10% withholding. An amendment to the contract for closings scheduled on or after February 16, 2016 should be added to change the potential rate of withholding to 15%.

Close It!™ House of the Week: Views of majestic Meridian Hill

This week we're taking a look at 1 bedroom condo, one of the last remaining in a brand new development that overlooks Meridian Hill Park. It's listed at $354,000.

The location is equidistant to the Columbia Heights and U Street Metro stop. Endless restaurants, bars and shops are within walking distance. Residents at the Lawrence House have access to a communal 1500-square-foot roof deck with built-in cooking facilities as well as a beautifully landscaped rear garden. The units themselves are finished with custom European cabinetry and exotic stone surfaces.

Assuming a homebuyer puts down 20 percent on a conventional loan, her cash to close number will be approximately $81,038.83. Monthly mortgage payments will then be around $1,537.92 per month (excluding HOA fees). For a complete picture of the cash to close, including the seller's side of the transaction, try the Web version of Close It™ or download the free Close It™ iOS app.

Income, purchase price limits for DC Tax Abatement increase

Income, purchase price limits for DC Tax Abatement increase

The purchase price and qualifying income limits for the District of Columbia's popular tax abatement program have gone up, according to the Office of Tax and Revenue, which should be good news for local homebuyers who have seen median home prices soar over $500,000 in recent months.

Under the latest guidelines, purchase price may not exceed $408,000. Somewhere in the neighborhood of 400 homes are currently on the market in Washington, DC at a list price that meets the purchase price qualification for DC Tax Abatement, based on a quick search on Home Snap.

Limits on household income, the other major qualifying factor for DC Tax Abatement, also increased. Review the income qualification table below:

Persons in household
Household income limits
1.
$57,120
2.
$65,280
3.
$73,440
4.
$81,600
5.
$88,140
6.
$94,680
7.
$101,220
8.
$107,760

For those who haven't stopped by in a while, we recently revamped our page on the DC Tax Abatement program. There we answer several commonly asked questions about the program and address some of the finer points on qualification criteria. The topic of household income, for example, is a popular one.

The DC Tax Abatement program is one of our favorite topics to write about. Check out our collection of articles on DC Tax Abatement to learn more about how the program works and how to qualify.

Maximum VA Loan county limits updated for 2016

Maximum VA Loan county limits updated for 2016

The Department of Veterans Affairs Loan Guaranty Program recently published county “limits” to be used for VA Loans effective January 1, 2016.

Please note, these limits do not reflect a maximum amount that an eligible veteran is permitted to borrow, but rather, reflects the VA’s maximum guaranty amount for a particular county. The maximum VA guaranty amount for loans over $144,000 is 25% of the 2016 VA limit.

For example, an eligible veteran may borrow up to $625,500 to purchase a property in Washington, DC (2016 VA limit), with the VA guaranteeing 25% of the loan amount, or approximately $156,375.00. These amounts have remained unchanged in most of the DC Metro Region compared to the 2015 VA limits.

The limits listed below are for some counties in Maryland and Virginia, as well as for the District of Columbia. For a complete list of the county limits for 2016, please click the chart of conforming loan limits. If your county is not listed on the county limits chart on the VA website, the 2016 limit is $417,000.

State
County
2016 VA Limit
DC
District of Columbia
$625,500
MD
Anne Arundel
$517,500
MD
Frederick
$625,500
MD
Howard
$517,500
MD
Montgomery
$625,500
MD
Prince George's
$625,500
MD
Alexandria
$625,500
VA
Arlington
$625,500
VA
Fairfax
$625,500
VA
Falls Church
$625,500
VA
Fauquier
$625,500
VA
Loudoun
$625,500
VA
Manassas
$625,500
VA
Prince William
$625,500
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Our blog contains general information only, not intended to be relied upon as, nor a substitute for, specific professional advice. Rate tables and figures that appear on our blog are deemed reliable but not guaranteed. For current rates & policies, refer to our Quick Quote and Consumer Guide. We accept no responsibility for loss occasioned to any purpose acting on or refraining from action as a result of any material on our blog.