stimulus

Stimulus Update

The final bill passed by congress and signed by the President did away with the hoped-for $15,000 tax credit, for any purchase,but upped the previous $7500 first time buyer credit to $8000, and removed the provision that it be repaid by the taxpayer. While it wont bring the sweeping changes hoped for, it will provide some leverage where it is needed the most in the purchase cycle, to first time buyers.

Yesterday, President Obama revealed his plan to prevent some foreclosures. It will entice lenders to modify terms of existing mortgages to make them more affordable and forestall some, but not all foreclosures. You can read the details in this NY Times article. It will not save foreclosures that are already in progress, but it will help homeowners who are in danger of going into foreclosure stay above water. Here is an analysis.

As of Friday here is an update of the reconciled stimulus bill as it relates to real estate, as presented by the National Association of Realtors. Keep in mind, this is not law as of yet, but reflects the latest in the negotiations between the House, Senate, and House of Representatives:

Unlock America’s Economy: Economic Stimulus Bill Reconciled by the House and Senate

(Feb. 12) The Economic Stimulus Bill (The American Recovery and Reinvestment Act of 2009, H.R. 1.) has been reconciled by the House and Senate. The details of the legislation have not been finalized but we expect the legislation to include a number of important housing provisions, including the remedies for the housing crisis that NAR prescribed at the annual meeting in Orlando, Florida.

• Homebuyer Tax Credit – a $8000 tax credit that will be available for qualified purchase of a principal residence by a first time homebuyer between January 1, 2009 and December 1, 2009. The credit does not require repayment. Individuals who purchase in 2009 using financing assistance from state and local mortgage bonds will be permitted to use the credit, as well.
  Chart highlighting the major modifications to the First-Time Homebuyer Tax Credit> (PDF:309K)
• FHA, Fannie and Freddie Loan Limits – Revised loan limits for FHA, Freddie Mac, and Fannie Mae.Specifics have not been released but reports indicate that the 2008 limits have been reinstated for 2009 except in those communities where the 2009 limits are higher. Additional increases in individual communities may also be available at the discretion of the HUD Secretary.
• Foreclosure Mitigation & Neighborhood Stabilization – Funding for states and local communities to be used for neighborhood stabilization activities for the redevelopment of abandoned and foreclosed homes are authorized.

These elements of the American Recovery and Reinvestment Act of 2009 are the pillars of the NAR Housing Stimulus Plan presented to the 111th Congress. Additionally we continue to work closely with the Department of Treasury and Secretary Timothy Geithner to implement a mortgage buy-down program.

NAR also recommended that the Treasury Department expand the Term Asset-Backed Loan Facility (TALF) to include commercial mortgage-backed securities as eligible collateral. The Treasury has approved this recommendation and this will encourage investment in the commercial real estate market.

View All the Housing and Other Provisions of Interest to NAR>

Make no mistake — our work with Congress and the Treasury Department is not yet completed. As the leading advocate for homeowners and the real estate industry, the National Association of REALTORS® will continue to address the issues facing Americans who are trying to purchase a new home, protect their current home or preserve investment opportunities in residential and commercial properties.

NAR recognizes the efforts of the members of Congress and the Senate who understand that without a housing recovery, an overall economic recovery is impossible.