Stimulus Bill Passes!
Late Friday night Congress passed the $787 billion Stimulus package and sent it to the White House for signature. While all the details are still being sorted out I think we know the plan for Housing. The details on the 2 elements that may garner the most press are quoted from the National Association of Realtors (NAR) (full description here):
- – The bill provides for a $8,000 tax credit that would be available to first-time home buyers for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009. The credit does not require repayment. Most of the mechanics of the credit will be the same as under the 2008 rules: the credit will be claimed on a tax return to reduce the purchaser’s income tax liability. If any credit amount remains unused, then the unused amount will be refunded as a check to the purchaser. Here is a Home Buyer Tax Credit Chart that compares the new provisions to that which was on the books.
- -The bill reinstates last year’s 2008 loan limits for FHA, Freddie Mac, and Fannie Mae loans. These limits were equal to the greater of 125% of the 2008 local area median home price or $271,050 for FHA and $417,000 for Fannie and Freddie, with an overall maximum cap of $729,750. For the few areas where the 2009 limits were higher, the higher limits will apply. In addition, the bill includes language providing the HUD Secretary with the discretion, if warranted, to increase the loan limit for any “sub-area”, i.e.an area smaller than a county. The Secretary’s discretion is again limited.
These provisions are not as agressive as many hoped for, but they are very good, especially for first time home buyers. An $8,000 tax credit if you are a first time buyer and purchase a home in 2009! If this could apply to you, visit my website and start your free home search or give me a call.
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