Q: What are the benefits of homeownership?
A: Homeownership is part of the American Dream. June is National Home Ownership Month and is a great time to think about homeowner issues. Owning a home can provide security and stability. In turn, homeowners contribute to the strength of their communities. A long-term investment in a home becomes a long-term investment in the community. Buying or building a new home also fuels economic activity in communities. For individuals, tax benefits make homeownership attractive. On federal tax returns, real estate taxes in the year they are paid, local taxes and assessments if they are charged uniformly against all property in the jurisdiction and if they are based on the assessed value of the home, and mortgage interest paid for an individual’s principal residence can be deducted from taxes owed to the Internal Revenue Service. Long-term, a home is the largest investment most buyers will ever make, so it’s important to know what will happen when the home is sold. Federal tax law allows up to $500,000 of the gain from the sale of a principal residence to be tax-free for married couples filing a joint return or $250,000 tax-free for a single filer. The property needs to have been owned and used as the principal residence for two of the last five years before the sale. Moving before fulfilling those requirements due to health or employment reasons can still get you part of the gains from the sale tax-free. Gains are prorated based on the time spent residing in the home. Losses incurred from the sale of the home are not deductible.
Q: What help is available for homeowners facing foreclosure?
A: My office is hosting a free foreclosure prevention and Mortgage Assistance Fair in Des Moines on Saturday, June 28, from 9 a.m. to 2 p.m. in the Walnut Center at the Iowa State Fairgrounds. I’ve invited 50 lenders, as well as mortgage and credit counselors from the Des Moines area to participate and answer questions for home owners. The Department of Housing and Urban Development, the Iowa Home Ownership Education Project and Iowa Mediation Services will be there to help homeowners determine what might be done to avoid foreclosure and hold on to their homes. I encourage anyone with questions or wanting more information to attend, even if they’re not facing an immediate financial crisis because of increased mortgage payments. The foreclosure prevention and Mortgage Assistance Fair is free, and it’s a good opportunity to tap expert advice. Visit grassley.senate.gov for more details. Parking for the event is free of charge.