Maximum VA Loan County Limits for 2018

The Department of Veterans Affairs Loan Guaranty Program recently published county “limits” to be used for VA Loans effective January 1, 2018.

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 twenty-five (25%) percent of the 2018 VA limit. 

The limits listed below are for some counties in Maryland and Virginia, as well as for the District of Columbia.  To get a complete list of the county limits for 2018, please view here. [Please note, if your county is not listed on the county limits chart on the VA website, the 2018 limit is $453,100.]

STATE

COUNTY

2018 VA LIMIT

DC

District of Columbia

$679,650

MD

Anne Arundel

$517,500

MD

Frederick

$679,650

MD

Howard

$517,500

MD

Montgomery

$679,650

MD

Prince George’s

$679,650

VA

Alexandria

$679,650

VA

Arlington

$679,650

VA

Fairfax

$679,650

VA

Falls Church

$679,650

VA

Fauquier

$679,650

VA

Loudoun

$679,650

VA

Manassas

$679,650

VA

Prince William

$679,650

CLOSE IT! House of the Week: Ballston Living for Millennials

Calling all millennials who want to experience city life but don’t want to live directly in the district. We have a beautiful, spacious two-bedroom, two in a half bathroom condo with a den, located in the heart of Ballston-Virginia-Square which is listed for $735,000.  

This high rise has over 1,300 square feet and is move-in ready with granite kitchen counter tops, fresh paint, new carpet, a stackable washer/dryer plus two garage parking spaces, perfect for a roommate or significant other.

It’s full of amenities to include a pool, fitness center, and a party room. All of your friends can come to visit you because you are walking distance from Ballston and Virginia Square metro stops. You’ll be able to enjoy happy hours, dinners, and late night strolls of the city or even Uber to D.C. to sightsee or club hop. 

Assuming you put down 5 percent on a conventional loan, your cash to close numbers would be approximately $51,021. Monthly mortgage payments will then be approximately $3,112. For a more complete picture of what your cash-to-close figures would be for this condo, view the CLOSE IT! Web version or download the free CLOSE IT! iOS app.

Don't forget to tell your agent that you want to close with Federal Title & Escrow Company because home buyers save up to $750 by ordering closing services online. Read further here about ways to save at closing.  

State, federal tax benefits for homeowners

The ink has dried and keys have been exchanged. Your real estate agent snapped a few pictures for social media, commemorating the day you became a homeowner.

If you’re like most Americans, your home is now your largest asset. And while that comes with great responsibility, it also comes with some perks. Among those perks are the myriad tax benefits Uncle Sam has made available to homeowners, and here we will explore many of them.

  • Mortgage Interest Deduction

    Taxpayers who own their own home may deduct the interest paid toward their mortgage loan from their total income earned when it comes time to pay income taxes in April. The IRS says you can claim this deduction for a primary residence as well as a secondary residence such as a vacation home, provided you spend at least a few weeks out of the year at the secondary home.

    Points paid to lower home mortgage interest rate

    Some homebuyers and borrowers opt to pay “points” up front when obtaining a mortgage loan to lower the cost of their interest rate over the course of the loan. Each point is typically equal to 1% of the principal loan amount. The IRS says home mortgage points as prepaid interest, and therefore in most cases considers them tax deductible. Points paid on a home improvement loan, such as a home equity line of credit (HELOC) are also potentially tax deductible.

    Interest paid on home improvement loans, i.e., HELOC

    If you took out a home improvement loan to build or make improvements to your home, the interest may be tax deductible the IRS says, under the same guidelines as the mortgage interest deduction. It’s worth noting that to qualify for the full deduction the home interest benefit offers, the total amount of debt on all outstanding loans must be $1 million or less.

    Private Mortgage Insurance

    It’s common for homebuyers who put down less than 20% as a down payment to have to pay some kind of insurance policy on their mortgage loan. Amounts paid as mortgage insurance may be counted as home mortgage interest, the IRS says, which means private mortgage insurance (PMI) – also known as a "funding fee" for Veterans Affairs loans and "mortgage insurance premium" for FHA loans – may be tax deductible each year.

    Income / Interest on Reverse Mortgage

    A reverse mortgage is a loan product available for homeowners who are 62 years of age or older that allows them to convert the equity in their homes into cash. It’s called a reverse mortgage because the lender pays out the homeowner’s accrued equity each month rather than the homeowner paying a mortgage payment.

    The homeowners get to keep the title to their home and are not required to pay back the loan until they move, sell, reach the end of a pre-determined loan-period or die. At that time, the reverse mortgage would be due with interest.

    Because reverse mortgages are considered loan advances and not income, proceeds received from a reverse mortgage are not taxable, the IRS. Any interest accrued on the reverse mortgage is not tax deductible until it is paid.

    This article is for general information purposes only. Consult your tax professional. For further reading, consult IRS Publication 503 and IRS Publication 936
  • Homestead Tax Deduction

    The District’s Homestead Deduction allows homeowners to reduce the value of their property’s assessed value by $71,700 when computing their yearly tax liability, under the DC's Office of Tax and Revenue’s current guidelines.

    At Federal Title, your closing agent or attorney will assist with filing the necessary paperwork. You must file a properly completed DC Homestead Deduction application with the OTC and be able to demonstrate the property is 1) your principal residence and 2) the property is owner-occupied and contains no more than five dwelling units (including the unit occupied by the owner).

    Read more about the DC Homestead Tax Deduction

    Senior Citizen Deduction

    This is an important tax benefit to be aware of not only for senior citizens living in the District of Columbia, but also for the buyers of homes that were previously owned by senior citizens because it can give the potential buyer / would-be owner a false sense of the annual real property tax assessment.

    Property owners aged 65 and older (as well as District residents who can claim disability) may file an application for senior citizen and disabled property owner tax relief. This benefit reduces the qualified property owner’s real property tax liability by 50%. Income restrictions may apply in addition to the criteria that must be satisfied to qualify for the DC Homestead Deduction.

    When searching for homes and condos online, it’s common for websites like Redfin, Zillow, Homesnap and Trulia to list the previous year’s real property tax assessment. However, it doesn’t necessarily indicate if the previous owner qualified for any kinds of tax benefits that may have significantly lowered the liability compared to what a new owner would be liable for.

    DC Tax Abatement

    The District’s tax abatement program was designed by the local government to help lower income residents purchase property. Homebuyers who qualify for DC Tax Abatement are exempt from paying recordation tax at settlement. What’s more, they are also exempt from paying property taxes for the first 5 years they live in the home, beginning the next full tax year.

    For those who were unaware of the DC Tax Abatement program when they purchased their homes, it’s possible to apply for this tax benefit up to three years from the original purchase date. You will still need the meet the guidelines and supply proper documentation; however if you in fact qualify you may be entitled to a refund of part of the recordation tax paid at settlement.

    Purchase price and income restrictions apply – and they change from time to time – so check in with the DC Office of Tax Revenue or ask your Federal Title closing agent for the latest information.

    Read more on DC Tax Abatement.

    This article is for general information purposes only. Consult your tax professional. For further reading, consult IRS Publication 503 and IRS Publication 936
  • Homestead Tax Credit

    The Maryland Homestead Tax Credit operates to limit how much your property taxes can go up each year, if you live in the property as a principal residence. A homeowner pays no property tax on the amount of any increase of the assessed value that is above a cap. The Homestead Percent Caps for Maryland jurisdictions are listed on the website of the Maryland Department of Assessments and Taxation.

    In Maryland, if you meet the requirements and file an application, you may receive a discount on your real property taxes. To qualify you must 1) live in the property as your principal residence, 2) have been in the property as your principal residence for at least a year and 3) submit an application to the MD DAT.

    When you purchase your property, a document is typically filed with the deed stating you will be living in the property as your principal residence – each County has its own form. Once the Assessor’s Office for the County in which you purchased updates the assessor’s records to reflect you as the new owner, an Application for Homestead Tax Credit Eligibility is sent to your property.

    If you do not get an application via mail, you can download a Homestead Tax Credit application off the Maryland government website, fill it out and mail it in. Unlike other tax credits and exemptions, you need only apply once as opposed to every year.

    Read more about the Maryland Homestead Tax Credit.

    Homeowners Property Tax Credit

    This tax credit that offers relief for lower income homeowners sets a limit on the amount of property taxes any homeowner must pay based upon his or her income. Applicants must report total income – gross income before any deductions are taken – and the homeowner must provide documentation of all income sources, including non-taxable retirement benefits like Social Security and pensions, according to the Maryland Dept. of Assessments and Taxation. To qualify a homeowner’s net worth must not exceed $200,000 while the gross household income must not exceed $60,000 annually.

    This article is for general information purposes only. Consult your tax professional. For further reading, consult IRS Publication 503 and IRS Publication 936
  • Mortgage Certificate Program

    This is a relatively new program for first-time homebuyers offered by the Virginia Housing Development Authority. The credit matches dollar-for-dollar 20 % of the total mortgage interest paid by the homebuyer each year, thus reducing the amount of federal income tax they owe. The remaining 80 % of the total mortgage interest paid that year remains eligible for a tax deduction.

    Like most of the tax benefits mentioned in this article, the Mortgage Credit Corticated program comes with income and purchase price limitations. Those amounts vary depending on where the house is located. In the DC metro area, the limits are $121,900 for households of two or less and $142,300 for households of three or more, while the purchase price limit is $500,000.

    Further, with this program a homeowner who sells his or her property in the first nine years of homeownership may subject to a federal recapture tax.

    Livable Home Tax Credit

    The Virginia Department of Housing and Community Development administers this $5,000 income tax credit that offers tax relief to individuals and corporations who purchase a new accessible residence and a credit of 50 % of the cost of improvements up to $5,000 to retrofit an existing property.

    Like most of the tax benefits mentioned in this article, the Mortgage Credit Corticated program comes with income and purchase price limitations. Those amounts vary depending on where the house is located. In the DC metro area, the limits are $121,900 for households of two or less and $142,300 for households of three or more, while the purchase price limit is $500,000.

    Further, with this program a homeowner who sells his or her property in the first nine years of homeownership may subject to a federal recapture tax.

    For a new residential unit to qualify, an applicant must be able to demonstrate the residence includes three features of “Universal Visitability” or include at least three accessibility features such as a zero-step entrance, doors with a minimum of 34 inches of clear width and hallways that are a minimum of 36 inches of clear width, according to the latest application guidelines.

    For a retrofitted unit to qualify, an applicant must be able to demonstrate improvements included at least one accessibility feature.

    Historic Rehabilitation Tax Credit

    Those who choose to purchase and rehab a historical property in Virginia may be eligible for a rehabilitation tax credit aimed at preserving the state’s historic homes. The credit is equal to 25 % of the rehabilitation expenses, while the work must also be certified by the Virginia Department of Historic Resources. The cost of the rehab project must be equal to a least half of the residence’s assessed value or 25 % if the residence is owner-occupied.

    This article is for general information purposes only. Consult your tax professional. For further reading, consult IRS Publication 503 and IRS Publication 936
  • Office In-Home Tax Deduction

    Technically this would be a business expense tax deduction, but if you use a portion of your home as a home office, you may qualify for an Office In-Home tax deduction.

    To qualify for this benefit, the IRS says a taxpayer must use a specific area of his or her home strictly for business, although the space does not need to be marked off with a permanent partition.

    These Items are NOT Tax Deductible

    Most closing costs – title fees, home inspection fees, home warranties, real estate commissions and most other expenses related to the closing process are most likely not tax deductible. Only the items mentioned above are eligible for a tax write-off.

    Home improvements – costs associated with home improvements (outside of interest paid on a home improvement loan) are not tax deductible, but there is a silver lining. Since many home improvements add to the value of a home, it’s possible you could sell your property for more money down the road and recoup your investment.

    Transfer / Recordation taxes – these taxes are traditionally split by the homebuyer and seller in the DC metro area and are dependent on the sales price of the property. While they are not deductible, the IRS says buyers can include them in the cost basis of the property and sellers can reduce the amount realized on the sale.

    For Your Friends Who Are Still Renters...

    The District of Columbia and Maryland offer a tax deduction for renters to offset costs landlords add to their rental rates to pay their tax-deductible property taxes. Both credits come with income and other restrictions, but renters could get back as much as $1,000. Virginia does not currently offer a tax deduction for renters.

    Taking advantage of the renter tax credit is one way renters may be able to save toward a down payment on a house.

    This article is for general information purposes only. Consult your tax professional. For further reading, consult IRS Publication 503 and IRS Publication 936

Did we miss anything?

Tax credits and deductions for homebuyers and homeowners are constantly changing, so please let us know if we missed one of your favorites or if you have another one to add to our list.

Headlines: 11th Street Bridge project to launch major capital campaign

Here is a look at what's happening in real estate in and around the District of Columbia.

Expect to see more transit-oriented housing in the future

Transit-oriented development is driven in part by real estate market forces and changing demographics. Studies show  that single-person households are now the most common household type, and that young adults as well as seniors prefer living in pedestrian-oriented, urban-style communities served by transit. -Washington Post

DC files suit against Virginia couple over shoddy home renovations

The attorney general's office launched an investigation late last year, shortly after Hofgard signed an agreement with the D.C. Department of Consumer and Regulatory Affairs not to sell any more properties that had code violations. -WAMU

DC park aims to beat gentrification where others have failed

The project, which is getting half of its construction money from D.C. and will launch a major capital campaign this year, spans two areas with very different economic realities: the tonier Ward 6 neighborhoods of Capitol Hill and the Navy Yard neighborhoods to the northwest and the Ward 8 neighborhoods of Anacostia and Fairlawn to the southeast. -Next City

Here's where the largest Whole Foods Market in the region is going

The first phase of The Boro, a massive project that has not yet earned Fairfax County’s approval, is expected to deliver in 2018. It will feature the largest Whole Foods in the D.C. area, and one of the largest in the Mid-Atlantic, a Whole Foods spokeswoman confirmed. -Washington Business Journal

Half of DC couples filing income taxes separately had large income disparities

Couples who together earned between $100,000 and $350,000 a year had a less striking income differential, though the blog District Measured notes that 40 percent of people in that bracket still showed an income differential of 50 percent or more. -Urban Turf

Realtor Day at DC Design House

Realtor Day at DC Design House is happening Wednesday, April 22 from 10 a.m. to 3 p.m. with light bites and beverages being served at noon, provided by Federal Title.

Tickets are $30 and may be purchased at the door. Realtors who present a business card will receive a $5 discount, courtesy of DC Living Real Estate. 

This year's canvas is a McLean country estate. Twenty-four design firms have been selected to reimagine 28 spaces spanning three levels. This is the 8th Annual DC Design House to benefit Children's National Health System. In its first 7 years, DC Design House has donated over $1.25M to Children’s National.  

REALTOR DAY at DC Design House
Wednesday, April 22
10 a.m. to 3 p.m.
9526 Mackall Farms Lane
McLean, VA 22101

Tickets will be sold at the door and can also be purchased in advance here. The $5 Realtor discount is only available at the door. We hope you enjoy this special Realtor Day, all for a worthy cause of transforming children’s healthcare in our nation’s capital. 

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  • What's title insurance?

    Insure your legal ownership just like you'd insure the building, but for lots cheaper.

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