Tax return time: HDFC eligibility

HDFC is a tragic-comic circus, so I wouldn't consider those max numbers they state as hard and real ... especially for units that are being sold by the coop itself, rather than an individual owner.

In some, demonstrating a strong commitment to volunteerism for the building is still a strong pull. Long-term family stability also. In others, they just want as much money as possible from the outside, to continue their non-viable and often fraudulent practices.

Alan, something about your tone of voice tells me you've had some interesting dealings with HFDCs! Care to share?

u know a large portion of oversea income is tax exempt rite?

Triple Zero--

That's an interesting strategy you're planning here. Maybe this can work for you.

HDFC building vary enormously. Some are savvy, effective and thoughtful, others are unprofessional and uncontrolled. Many are yet other things or somewhere in between. I think HDFC buildings are a great idea (I recently bought in one), but my experience was that it took a lot of shoe leather and Streeteasy time even to begin to have a sense of the possibilities. The organization which is supposed to be something of a clearing house for HDFC buildings is called UHAB, and it may work well for some people's needs, but that wasn't the case for me.

Buying in NYC from Tokyo seems like a challenge. Buying an HDFC apt almost certainly can't be done from abroad. You need to be here even to find the apt you want, then the very elaborate paperwork you'll do and often protracted process to be accepted by the board will be even harder to navigate if you are far away. My advice is to pick your neighborhood and then follow the listings obsessively until you see an apt that you think is right. Then throw yourself at it emphatically and with all the focus you can muster.

But you wanted to know about the income ceilings. I have heard stories of buildings which bent the rules on this but mine sure didn't. Many HDFC buildings are sticklers about this stuff. Each building sets its own income ceilings and flip taxes. The ceilings are a percentage of the median income for the census tract where the building is. So HDFC buildings a few blocks away which look comparable can in fact be very different as regards income ceilings. Be aware that your building will almost certainly want several years of tax returns, so there needs to be a pattern over time for your income that is plausible for the building.

I don't know if it's true that more HDFC properties are coming on the market. I have seen erratic expansion and contraction of supply over the past 7 years or so. But I have been looking at the very low end of the price spectrum, and only in upper Manhattan, and that may mean my sample size is too small to be meaningful as regards larger trends. But ... I am not seeing any big increase when I (nostalgically, for old times sake) do the searches that I did every day without fail for years before I found my present lovely apartment.

Goo luck--I hope you keep posting to let us know what you decide to do, and how it goes.

@Uptown2012 --

Thanks for the post! Don't worry; I'm not planning to actually buy a HDFC unit from abroad. I won't be moving back for another two to three years and am just thinking about how to lay groudwork now. So this would be my first year having a "HDFC-optimized" salary.

This 25% devaluation of my income and savings is a killer in seemingly every way; savings decimated, obviously, but also my salary has dropped, so when I move back to NY and am negotiating salary in a future job, I'm 25% behind when they ask how much I made at my last job. But at least there's a silver lining!

We were looking at the East Village -- my wife wants to live there; it has improved markedly since my childhood, when it was a drug-addict-populated hellscape -- and up in Inwood/Washington Heights. I don't know those northern neighborhoods well, but that's where the income finagling will come into play, as opposed to the EV where the maximum eligible income is usually very high.

http://streeteasy.com/nyc/sale/745000-coop-268-east-4th-street-east-village-new-york

Here's a good example (though I'm not interested in this exact unit):

http://streeteasy.com/nyc/sale/774873-coop-834-riverside-drive-washington-heights-new-york

The income restriction is $69,000, but I've seen others where 100% of average income is the limit. Consider one with a $60k requirement: you'd fit perfectly if you made, say, $59k, but would be turned away at the door if you made $61k. You'd be foolish to declare $61k rather than $59k, since it won't improve your prospects any when applying for a conventional mortgage, but *would* open up some HDFC units.

The UHAB site has some listings that are so cheap that they're downright suspicious. I wonder what the neighbors there are like!

Triple Zero--

Sorry I missed that you really are just setting up the income now, and will look once you're back. Very good planning! But--the income ceilings in buildings are adjusted every so often, so it's possible that the building you see listed one way now will change its number by the time you are back and ready to buy.

Some buildings would probably let a couple thousand dollars above the limit slide--especially since they typically will look at three years income and may average them. Some buildings have income ceilings very much higher than those you mention.

Many people have deep romances with the East Village. I don't know--my poor striving immigrant ancestors struggled like heck to get out of there, and nowadays it looks to me not too different from bad old drug-addict-popoulated hellscape of which you speak, except that it's extremely expensive and the lovely former community gardens are turning into undistinguished, pricey condos. But of course there is charm of a sort and a ton of restaurants, bars, and fun things. Inwood and Wash Hts will give you vastly more space, lots of serenity, big parks and a vastly less theme-parky vibe. Some people think that sounds divine--others consider it dull.

If I were you, I'd do whatever works best with taxes, etc right now, and let your income worry about itself until you are back and ready to buy. You can find HDFCs to suit many different income levels, so you probably don't need to try too hard to game the system now.

this is not exactly the OP's question, but it is both HDFC and tax return related, so here goes:

1) as we all know, tax returns are due in a couple of weeks. Let's say my income tax returns for 2010 (filed 4/15/11) and 2011 (filed 4/15/12) show me as being under the income restriction threshhold.

If my income tax return for this past calendar year (2012) is NOT YET FILED, but, were it to be filed, would in fact show an income that would be above the limit, would I be able to preserve my HDFC "eligibility" by asking for (and getting from) the IRS an extension for the filing of my taxes until 10/15/13. I.e., would I still be considered income eligible during the window of time between now and October 2013, when my return is actually filed?

Conversely, if I do indeed go ahead and file my 2012 tax return on 4/15/13, and it is above the limit, can I assume I've effectively shut myself out of HDFC eligibility until such time, as ever, that my income dips low enough again, as demonstrated in a tax return? (Maybe 4/15/14)

2) Someone above had mentioned that generally three years worth of tax returns are used for these purposes, with income averaging. Is that a hard and fast rule, or is possible to use just one year (e.g., the year of the most recently filed return) if that one year is below the income limit (while presumably some prior years would not make the cut, so to speak)?

Really curious to know the answers to the above from someone who is knowledgeable on these matters and not just guessing

Thanks!

My experience is that different buildings' boards handle this differently. Depending on the building, it might fly as you propose--or they might say they need to see this year's filing. It seems to be the case that boards have freedom to decide how to interpret the income ceiling rules, whether by averaging or by absolute maximums. Whether or not the board is anxious to see the sale go through probably plays a role in how the rules are interpreted. With some building you might possibly be able to submit a narrative explaining your financial picture--what makes the income slip above the ceiling this year, and why you are arguing that in the longer term it is in the correct zone. It could be helpful to think of the board application as part of a relationship you build with a specific building, rather than focusing on the (unclear, maybe even inconsistent) "rules" of the HDFC program overall.