Home Buyer Tax Credit: 10 Things to Know
On Nov. 6, the president signed the new Worker, Homeownership, and Business Assistance Act of 2009 into law. The centerpiece of this legislation is the extension and liberalization of what is now inaccurately called the first-time home buyer credit. Here are the 10 most important things to know about the revamped credit.
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On Nov. 6, the president signed the new Worker, Homeownership, and Business Assistance Act of 2009 into law. The centerpiece of this legislation is the extension and liberalization of what is now inaccurately called the first-time home buyer credit.
Here are the 10 most important things to know about the revamped credit.
1. New purchase deadline extends into 2010
The home buyer credit was previously scheduled to expire on Nov. 30, 2009. The new law extends the deal to cover purchases of U.S. principal residences that close by April 30, 2010. However, if a home is under contract on that date, the deadline for closing is extended to June 30, 2010.
2. Existing homeowners can now qualify
The new law allows a reduced credit for existing homeowners who buy a replacement U.S. principal residence after Nov. 6, 2009. The credit equals the lesser of: (1) $6,500, or (2) 10% of the price of the replacement home, or (3) $3,250 for a buyer who uses married filing separate status. The new existing-homeowner credit is only available for purchases that close after Nov. 6, 2009. To qualify, the buyer must have owned and used the same home as a principal residence for at least five consecutive years during the eight-year period ending on the purchase date for the replacement principal residence. If you’re married, your spouse must pass this test too (whether or not you file jointly).
3. Larger credits still allowed for first-time buyers
Before the new law, the home buyer credit was only available to so-called first-time buyers, which means someone who had not owned a U.S. principal residence during the three-year period ending on the purchase date for a home that will serve as the buyer’s new principal residence. If you’re married, both you and your spouse must pass the three-year test (whether or not you file jointly). These first-time home buyer rules still apply for purposes of claiming a larger credit of up to $8,000. Specifically, the credit for a first-time buyer still equals the lesser of: (1) $8,000, or (2) 10% of the home purchase price, or (3) $4,000 if you use married filing separate status.
4. Higher-income folks can now qualify
The home buyer credit is phased out (reduced or completely eliminated) as income goes up. However, the new law significantly raises the phase-out ranges so that many more higher-income buyers will now qualify.
* For purchases after Nov. 6, 2009, the phase-out range for unmarried individuals and married folks who file separately is between modified adjusted gross income (MAGI) of $125,000 and $145,000 (way up from the old-law range of $75,000-$95,000).
* The phase-out range for married joint filers is now between MAGI of $225,000 and $245,000 (way up from the previous range of $150,000-$170,000).
5. New $800,000 purchase price limit
For purchases after Nov. 6, 2009, the credit can only be claimed for a principal residence that costs $800,000 or less. So if your new home costs $800,001, the credit is completely off limits (but I doubt too many people will feel sorry for you).
6. No more credits for kids or dependents
For purchases after Nov. 6, 2009, the home buyer must be at least 18 years old on the purchase date to qualify for the credit. Also, no credit is allowed for a buyer who can be claimed as a dependent on someone else’s Form 1040 for the year of the purchase. These new rules are intended to shut down the practice of claiming the credit for youngish buyers who really don’t even have incomes of their own (like college students who use money from their parents to buy a pad near campus).
7. New anti-fraud rules
A recent government report said the IRS has already identified over 100,000 returns with potentially fraudulent home buyer credits. This is hardly surprising when the government is willing to give away up to $8,000 in free money to anyone who files a return, even when that person reports no income. Believe it or not, absolutely no documentation was required to claim the credit, until now. For credits claimed on 2009 and 2010 returns, buyers must attach a properly executed real estate settlement sheet to the return. Also, the IRS can now simply disallow credits in fishy circumstances (like when it appears the $8,000 credit is being claimed by someone who already owns a home).
8. Credits can still be claimed on prior-year returns
Under the revamped rules, you can still claim the credit for a 2009 purchase on your 2008 return (although you would now generally have to file an amended return to do so). You can also claim the credit for a 2010 purchase on your 2009 Form 1040. This allows you to cash in on the credit sooner rather than later, and it may also allow you to claim a larger credit if your income in the year of purchase is higher than in the preceding year.
9. Credits must still be repaid in some cases
Under old-law rules for homes purchased between April 9, 2008 and Dec. 31, 2008, buyers are generally required to repay the credit over 15 years. However, this repayment rule is generally eliminated for purchases after 2008. That said, you might still have to repay the credit if you sell your home within three years of the purchase date or stop using it as your principal residence during that period.
10. Special rules for military service members
For military service members on extended duty outside the U.S., the new law lengthens the deadline for closing on home purchases for an extra year, to April 30, 2011 (or June 30, 2011 for homes under contract on April 30, 2011). The new law also waives the credit repayment rules for service members who are forced to move due to receiving new orders. The same special rules apply to members of the foreign service and intelligence communities.
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'Extreme Makeover' thrills family
Not the dark clouds or the rain. Even standing in one spot with little to do for eight hours. Nothing seemed to dampen the spirits of the 3,000 people who gathered in Armada to see Ty Pennington and the stars of ABC-TV's "Extreme Makeover: Home Edition" reveal to Maryann Gilliam and her six children their new home.
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Extreme Makeover Home Edition: Gilliam Family
Lombardo Homes contributes to the Gilliam's family new house being built in the fastest time ever in the Extreme Makeover: Home Edition show’s history—in 53 hours and 54 minutes—which is half the show’s normal build time!
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David Gilliam simultaneously worked several jobs to support his family in order to fulfill his dream of becoming a firefighter and EMT. He was one state test away from getting his instructor coordinator license when he suddenly died. As a result of her husband’s autopsy, Maryann learned that the basement of her family’s home was contaminated with dangerous levels of toxic spores. Her doctor advised the mother and her six children to vacate the house for health reasons. The community has rallied around the Gilliams; since David’s death, the family have lived with several family members, neighbors and friends. Currently they are living with Maryann’s sister.
In this episode of Extreme Makeover: Home Edition, the design team will not only be changing lives, but also saving them – the Gilliams’ doctor said they cannot return to the house because they will all get sick in that environment.
While the Extreme Makeover: Home Edition design team, local builders American Heartland Homebuilder and Lombardo Homes, contractors and hundreds of workers and volunteers are building a new house for the Gilliam family, the family will go on vacation to Hilton Sandestin Florida. On this episode, the house is built in the fastest time ever in the show’s history—in 53 hours and 54 minutes—which is half the show’s normal build time!
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Arbor Creek Offers You More Home for Your Money!
New in Your Neighborhood: Arbor Creek
Project: Arbor Creek, single-family homes that range from 1,385 to 2,601 square feet and are base priced from $129,900 to $179,900. Place: Monroe Builders: Lombardo Homes, President Anthony Lombardo, member of the Building Industry Association of Southeastern Michigan and its 2007 Builder of the Year.
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Project: Arbor Creek, single-family homes that range from 1,385 to 2,601 square feet and are base priced from $129,900 to $179,900. Place: Monroe Builders: Lombardo Homes, President Anthony Lombardo, member of the Building Industry Association of Southeastern Michigan and its 2007 Builder of the Year.
Other projects: Falkirk, Flat Rock, single-family homes from $154,900; Aspen Ridge Village, Ypsilanti Township, condominiums from $142,900.
Appeal: Several nice open floor plans, that include huge master with walk-in closet, pantry, generous storage throughout, full basement, attached two-car garage, close to both Detroit and Toledo.
Base price per square foot: $61.50
Included: Attached two-car garage, with steel door, pedestal sink in powder room, Shaw carpet, first- or second-floor laundry room, vinyl flooring in kitchen and nook, Aristokraft 30-inch wall cabinets in choice of finishes, Whirlpool appliances including range, two-level dishwasher and recirculating hood fan.
Add-ons: Upgraded elevation ($750); air-conditioning ($2,900); maple cabinets ($625).
Insulation and other features: R-13 insulation in exterior walls, R-30 attic insulation, 40-gallon water heater, furnace, vinyl windows with double-pane insulated glass, 150-amp electrical service, insulated steel entry door with full weatherstripping, outdoor GFI electrical outlets.
Lot size: 75 by 122 feet.
Association fees: $480 yearly.
Schools: Monroe Community School District, MEAP scores are 15.7% above state average.
Taxes: $24 per $1,000 of a home's assessed value. Values vary by municipality, but are generally 50% of the current value.
Comments: Lombardo Homes has lures that include a limited number of government-secured trust funds for future college students of new home buyers, FHA and VA financing.
For information: Call 734-782-3626 for appointment or go to www.lombardohomes.com.
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Thornton Farms has it all!
New in Your Neighborhood: Thornton Farms
Project: Thornton Farms offers single-family homes that range from 1,005 to 2,705 square feet and are base priced from $136,900 to $186,900. Place: Dexter, Washtenaw County.
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Project: Thornton Farms offers single-family homes that range from 1,005 to 2,705 square feet and are base priced from $136,900 to $186,900. Place: Dexter, Washtenaw County. Builders: Lombardo Homes, President Anthony Lombardo, member of the Building Industry Association of Southeastern Michigan and its 2007 Builder of the Year.
Other projects by Lombardo: Aspen Ridge Village, Ypsilanti Township, condominiums from $139,900; Brookside, Superior Township, single-family homes from $149,900; Meadowbrook, Milan, single-family homes from $157,900.
Appeal: Thornton Farms is close to I-94 and only minutes from downtown Ann Arbor. It includes a community clubhouse and swimming pool, six floor plans with spacious master suites and lots of storage space.
Base price per square foot: $69 to $136.
Included: First- or second-floor laundry, pedestal sink in powder room with oval mirror, vinyl flooring in bathrooms, kitchen and foyer, Aristokraft 30-inch wall cabinets in kitchen, attached two-car garage.
Add-ons: Stainless steel Whirlpool microwave, flat-top stove, dishwasher ($1,250); prep for full bath in basement ($900); gas fireplace with marble surround and mantel ($3,500).
Insulation and other features: R-13 insulation in walls, R-30 in ceilings, 40-gallon water heater, furnace, vinyl windows with double pane glass, 150 AMP electrical service.
Lot size: 60 by 100 feet.
Association fees: $220 biannually covers snow removal on common streets, maintenance of pool, clubhouse, playground and common areas.
Schools: Dexter, MEAP scores 15.7% above state average.
Taxes: $31.31 per $1,000 of a home's assessed value.
Comments: Thornton Farms is in a quaint village with only 2,800 residents along the bank of the Huron River. It has lots of city parks and is close to several Huron-Clinton Metroparks. FHA financing is available for qualified first-time buyers. Incentives for military, education, law enforcement, firefighting, health care and government workers.
For information: 734-424-1315, www.lombardohomes.com. Open noon-6 p.m. Monday, Tuesday and Friday, and noon-5 p.m. Saturday and Sunday. Closed Wednesday and Thursday.
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BUILDER DEVELOPS FOLLOWING
Lombardo Homes can-do attitude has lead to dramatic success in new development areas all over Southeast Michigan. With strong leadership and dedicated employees Lombardo Homes risen to prominence in every community it has developed in, its commitment to excellence has created respect even amount its competitors.
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NEW HAVEN—No new subdivisions had been built in New Haven in nearly 20 years when developer Anthony Lombardo approached village officials a few years ago about building 350 homes on Gratiot and 27 Mile.
“New Haven had that stigma of people not wanting to come here,” said Brett Harris, a former village president. “Developers...would usually send people to Macomb Township or somewhere else.”
Everyone except Lombardo, who friends call “the king of construction in Macomb.” He likes to mine untapped markets.
“We don't turn our heads because of perception,” said Lombardo, president of the Lombardo Cos. in Washington Township. “We research the truth and base our decision on the truth. This was an area that I thought would see a lot of growth. We are always looking to create opportunities in new areas where people don’t think there is opportunity.”
That can-do attitude has helped make Lombardo the largest residential construction firm in Macomb County and the sixth-largest home builder in southeast Michigan, according to Housing Consultants Inc. in Clarkston.
At the helm of it all is Lombardo, who, at just 36 years old, is a formidable force. His company is developing everything from luxury townhouses in downtown Macomb Township, to condominiums in Detroit to a mobile home community in Ray Township.
Last year the company constructed 320 homes and revenues topped $70 million. Much of the firm’s work is subcontracted, but there is an in-house staff of 100 employees.
Lombardo’s developments dot the landscape of northern Macomb County, from the $140,000 Cascades at Stony Creek condominiums on 26 Mile in Shelby Township to town homes, condominiums and houses costing $300,000 or more in Macomb and Washington townships.
The fanciest residences fetch $320,000 in the Autumn Creek neighborhood on 29 Mile, between Van Dyke and Schoenherr.
Lombardo Companies, founded in 1961 by his parents Cossimo and Antoinette, has its headquarters in a posh office park flanked by a bubbling pond and ornate shrubs on 26 Mile. It began by building homes in Warren and southern Macomb County.
Today, its developments are widely praised, and Lombardo is respected by competitors.
“I think he’s got a first-class operation,“ said Washington Township developer Ed Karam. “He’s a fine gentleman. I have never heard anything bad about him.“
Lombardo dismissed the praise as just doing good business.
“If we find needs in the community and if we can put them together to make them work, we do,“ Lombardo said. “Most people understand we are a business and we need to make money, and I understand their issues, so we try to make solutions for both.“
Skilled negotiator
Part deal maker, part conciliator, Lombardo has developed a reputation for working with residents and local officials in an industry that has a reputation for doing the exact opposite.
At times he has to clear formidable obstacles. Lombardo’s plans to build a 300-mobile home community on 27 Mile and Gratiot were held up for nearly a year because the company couldn’t reach an agreement with township officials over water and sewage issues.
Ray Township doesn’t have a public water and sewer system. A deal was finally brokered last month when the company reached an agreement to purchase water from Washington Township, which buys water from the Detroit Water and Sewerage Department.
And Lombardo forged ahead with homes in New Haven, even when a village official told him $130,000 homes would never sell, Harris said.
Four years later, Lombardo has sold more than 150 homes. And more construction in New Haven could be on the way. The village has given Lombardo the green light to build 1,200 additional homes.
“They are nice houses,“ said Kristina Goward, a homemaker who bought a $158,000 home in Amherst with her husband William in December 2001. “The homes are well built. It went over our expectations.“
Father was influence
Lombardo often makes substantial donations in the communities in which he does business. He donated 23 acres to the Romeo school district for a new elementary school; paid $100,000 for upgrades at a municipal park in New Haven; and has donated land for parks in Washington, Shelby and Chesterfield townships.
Lombardo’s success has not gone unnoticed. The Building Industry Association in Southfield named him the Young Builder of the Year in 1998.
“Whatever Anthony Lombardo has told us, he has always backed it up with fact and carried out whatever he told us he would do,“ Kirsh said.
It’s a lesson learned from his father that Lombardo continues to follow, even today.
“My dad always said, ‘fulfill your obligations and always go one step further,’“ Lombardo said, glancing at a portrait of his parents, now deceased, that hangs in the company conference room.
“If we aren’t going to do a job right, we aren’t going to do it because nobody wins—I don’t win, the community doesn’t win and the customer doesn’t win.“
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SALES RESERVATIONS SOAR AT LOMBARDO COMPANIES’ CURTIS STREET COMMUNITY MONTHS BEFORE CONSTRUCTION COMMENCES
Even before construction had begun, the new community in Washington Township has had more than half of its planned properties reserved. Since 1961 Lombardo Homes has been recognized for its efforts to create affordable high quality homes. The new Curtis Street development continues this tradition of impeccable quality standards and affordable housing.
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Washington Township, Michigan—Just weeks after commencing its preliminary marketing campaign and four months before launching construction, Lombardo Companies has already signed reservation agreements for 24 of the 35 single-family homes planned for its Curtis Street neighborhood in Washington Township.
The June 4 Curtis Street community introduction and pre-sales registration launch at Lombardo’s nearby Saddlebrook community sales center saw interested buyers lined up prior to the 10 a.m. opening. An earlier direct mailing and a single reference in a display advertisement in the Sunday newspaper announced plans for the community.
“We really had very modest expectations for this preliminary launch given the limited marketing we had done,” said Lombardo Companies President Anthony Lombardo. “That first day we collected 14 reservations, and have had 10 more reservations since. It’s been nothing short of remarkable.”
Located on 26 Mile Road between Van Dyke and Mound, Curtis Street will feature three-bedroom colonial style homes—including select four-bedroom options—that range from 1,410 to 1,670 square feet. Construction is slated to begin in October with homes available for occupancy by mid-April 2004. The intimately scaled neighborhood will feature open spaces and a children’s play area. Home prices will range from $169,900 to $181,900.
“Curtis Street’s appeal is two-fold,” Lombardo said. “First, Washington Township has become a very desirable address, and, second, it’s hard to find new homes of this high quality in the area for under $200,000.”
Other Lombardo communities in Washington Township include Timber Mill condominiums and Timber Mill North single-family homes. Founded in 1961, the Lombardo Companies has been a leading provider of quality residential developments across southeast Michigan, transforming thousands of acres over the years into some of the area’s most popular single-family, manufactured home and multifamily properties. For further information Curtis Street, or any of the Lombardo Companies other developments, contact the organization directly at 810-781-7900, or visit its website at www.lombardocompanies.com.
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The Macomb Daily - More people discovering New Haven, New Baltimore"
Lombardo Homes recognition of the changing economic climate of southeast Michigan has lead to its highly successful developments in New Haven and New Baltimore. In contrast to the decline in other areas, Lombardo Homes forethought has driven them to be a part of the fastest growing communities in Michigan.
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On Sunday morning, the Rev. John L. Mack will be looking for new faces at the Greater New Hope Missionary Baptist Church in New Haven.
As often as not, over the last couple of years, he's been seeing some.
"Every month, we get new families moving in," said Mack, a New Haven native who has been the pastor at Greater New Hope for 21 years.
"New Haven has been one of the best kept secrets for a good place to raise a family. I'd say that secret is getting out," he said.
New Haven is one of the fastest growing communities in the state in the first half of this decade, according to a new report issued by the U.S. Census Bureau. In fact, the two "new" Macomb County communities -- New Baltimore and New Haven -- occupied two of the top three spots in the state's top 10 list, in terms of percentage population growth.
South Rockwood, a village in Monroe County, grew from 1,284 people in 2000 to 2,220 people in 2004, an increase of 72.9 percent. New Baltimore went from 7,405 to 10,857, a 46.6 percent increase. New Haven jumped from 3,071 in 2000 to 4,421, a 44.0 percent increase. The 2000 figures are taken from the census conducted that year, the 2004 figures are an estimate made by the Census Bureau of how many people lived in each community on July 1 of that year.
The influx of people is changing the perception about New Haven, Mack said.
"I think in the past, people had a negative image of New Haven," he said. "Once Lombardo Co. started building new homes here, people started taking a second look. They found out that in terms of having a nice place to live, crime, getting an education for your kids, New Haven is a good place to be," he said.
Greater New Hope is just one of three churches that have built new, larger sanctuaries in New Haven in the past year and a half or so, to accommodate new families.
The Census Bureau reported that Macomb County has gained 34,511 residents from 2000 to 2004, an increase of 4.4 percent. In addition to New Baltimore and New Haven, two other Macomb communities also made state-wide "top 10" lists -- one for growth and one for population loss.
Sterling Heights had the third largest gain in the state in numerical growth of residents, adding 3,005 people to 127,476, a 2.4 percent increase.
Warren was among the leaders in population loss, losing 2,129 people between 2000 and 2004, to finish with a population of 136,118, a 1.5 percent loss.
With the changes, Warren now ranks as the nation's 168th largest city; Sterling Heights is 182nd.
The state rankings only include cities and villages, otherwise Macomb and Lenox townships would have made the fastest-growers list.
While communities in central and northern Macomb County were growing, every community south of 14 Mile Road lost at least some population during the 4-year period.
Detroit was among the biggest population losers in the country and, for the first time since 1900, is no longer one of the 10 largest cities in the nation. Detroit has lost 51,072 people between 2000 and 2004 -- an average of almost 35 people per day. With the loss, Detroit slipped below San Jose, Calif., to rank as the 11th largest city in the nation with 900,198 residents. New York is the largest city by population in the country with a 2004 population of 8.1 million, up 1.2 percent from 2000.
Economic reasons are in part behind the increase in Macomb County's population, said Jim Jacobs, an economist and vice president at Macomb Community College.
"As the Detroit metro area has lost jobs, people then begin to think 'hmmm, I better save money on housing,'" Jacobs said.
"This then is viewed as a lower-cost market. That's why you see the growth in areas like New Haven," he said. "For working people this becomes a more affordable county than some of the alternatives."
Jacobs said the growth in Macomb County's housing market hasn't slowed significantly, in part, because of savvy changes made by the area's home builders over the past few years.
"The developers noticed that trend three years ago and adjusted their product accordingly. They stopped building the $500,000 homes and focused on a different segment of the market," he said. "They hit the market right on the head."
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Lombardo Homes Sponsors Habitat for Humanity Home Groundbreaking Ceremony to be held July 8th
Lombardo Homes is the driving force behind the new Habitat for Humanity project starting in Macomb country. As well as leadership and financial support Lombardo Homes employees are personally volunteering for the project which began on July 8th. This charitable project has been recognized by leaders of the community and opening ceremony was attended by some of the most influence people in Michigan.
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Washington, Michigan, June 28, 2005-Lombardo Homes of Washington Township has signed on as the exclusive builder sponsor of "REALTOR Build 2005 - Building the American Dream."
“REALTOR Build 2005”, spearheaded by the Metropolitan Consolidated Association of REALTORS (MCAR), is a Macomb County Habitat for Humanity project to build a home for the Birdsall Family from Roseville. The official Groundbreaking Ceremony will be held July 8th on the actual homesite located in a quiet, established neighborhood on Macomb Street across from Macomb Gardens Park.
As a major sponsor of the project, Lombardo Homes is making a substantial cash contribution as well as providing all the skilled trades and construction leadership on each of the 9 volunteer build dates throughout the summer. In addition, every Lombardo Homes employee will be a part of the volunteer project when the company comes together at the Roseville home site on August 20th to hammer nails, lift lumber and raise the walls on the 3-bedroom single family home.
Slated for 3PM, the July 8th Groundbreaking Ceremony will kickoff the summer-long project and will be attended by the Birdsall Family, Michigan Congressman Sander Levin (D), Macomb County Sheriff Mark Hackel, Macomb County Treasurer Ted Wahby, Lombardo Homes COO Sebastian Lombardo, MCAR Executive Director Walt Baczkowski, Macomb County Habitat for Humanity Executive Director Daniel Wiiki and other sponsors.
Of course, the focus of the event will be on the Birdsall Family. David & Jeanine Birdsall are newlyweds with two daughters, Briann and Paige aged 5 and 6. David is a student of graphics arts and Jeanine is a Medical Assistant practicing at a Macomb County hospital. Recently, the family has struggled and persevered through a myriad of difficulties and expressed deep gratitude for the help of the Habitat program, the sponsors and the community as a whole.
“Contributing to the community in very tangible ways is an important and vital part of our company culture,” says Sebastian Lombardo of Lombardo Homes. “When we position the human element at the forefront of our business, our core values become part of our operating and decision-making procedures. It makes us a better company.”
“REALTOR Build 2005”, which will commence in mid-July and continue throughout the summer, will culminate in a Home Dedication Event in November.
Established in 1961, Lombardo Homes has developed thousands of acres, garnering a reputation for building homes with superior craftsmanship, thoughtful details and unsurpassed value. Privately owned and operated for more than 40 years, Lombardo brings vast experience and a unique perspective to the communities in which they build. Still created with a hands-on approach, each residence bearing the Lombardo signature is an individual work of art, showcasing fine craftsmanship inside and out.
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