Realtors better prepared to help
By Matt Caulder
Published in News on September 23, 2013 1:46 PM
Goldsboro Realtors are now better equipped to help prospective buyers of historic properties understand the potential tax credits they can qualify for by rehabilitating historic properties as well as how to find financing for the projects.
At a luncheon earlier this month, Realtors and city homeowners gathered to hear presentations from Jason Queen, director of Urban Issues for Preservation North Carolina, and Will Mitchell, home mortgage consultant and renovation specialist for Wells Fargo.
Queen works with the Raleigh-based organization which works to hold and sell dilapidated properties with historical value until they can be renovated.
He guided the Realtors gathered through the state tax credits available for historic home restoration -- 30 percent for non-income producing rehabilitation projects such as home restorations and 20 percent for income-producing properties.
The qualifications require that the property must be on the National Register of Historic Properties or be certified as contributing to a historic area.
They must also be certified projects and cost more than $25,000 in 24 months.
The credits extends out for five years but can be stretched to 10 years to use all of the credits against your income tax.
Queen presented a case study on the Governor Charles B. Aycock house on William Street.
If the house was purchased for $50,000 and $150,000 was put into the renovation of the house and only $100,000 of the repairs were eligible for the tax credit $30,000 dollars of the repairs would go against the buyer's state income tax.
Queen said this makes the cost of the almost 5,000-square-foot house only $170,000.
Mitchell is one of two eastern North Carolina employees handling Wells Fargo's renovation loans, which allow property buyers to borrow the money to pay for the purchase and renovation of their historic home just as they would any other house.
This allows someone to get all the funds for needed repairs and the bank will hold the funds in an account to pay the various contractors, making the process easier on the homeowner, the builders and the bank, Mitchell said.
"I have yet to meet a builder who has a problem with that. They know they are going to get paid because the money is there," Mitchell said.
The program can loan up to $417,000 and the amount is based on the value of the house after renovations are complete, not the value of the house as it stands before purchase.
"This definitely isn't for everybody, not everyone can visualize how the house will look and they still have to qualify for a loan like anybody else," Mitchell said. "And they are the same qualifications for any other house loan."