Stimulus Tax Credit Changes

The $790 billion stimulus package hammered out by House and Senate conferees late yesterday afternoon drops the repayment feature on the home buyer tax credit. This is great news since the repayment requirement was a discouraging some buyers from taking advantage of the tax credit.

The legislation also extends the effective date of the tax credit, which is for up to $7,500, to September 1 (from June 30). Buyers that purchase a home in 2009 using financing assistance from state and local mortgage bonds will be permitted to use the credit as well.

Hopefully the combination of changes will encourage more buyers to "get moving".

Other provisions reportedly in the bill that could help housing markets and communities include:
  • FHA and conforming loan limits - 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 secretary of the U.S. Department of Housing and Urban Development.
  • Foreclosure mitigation and neighborhood stabilization - Funding for states and localities to be used for neighborhood stabilization activities for the redevelopment of abandoned and foreclosed homes are authorized. Some news reports put the funding level at $2 billion.
  • Rental assistance - Up to $1.5 billion to provide short-term rental assistance and other aid for families during the economic crisis.
  • Transportation infrastructure - Up to $29 billion for highway construction projects, $8 billion for rail projects, and $5 billion to weatherize low-income homes.
  • Rural housing development - Increased funding for the Rural Housing Service direct and guaranteed loan programs.
  • Low-income housing grants - Allow states to trade in a portion of their 2009 low-income housing tax credits for Treasury grants to finance the construction or acquisition and rehabilitation of low-income housing, including those with or without tax credit allocations.
  • Tax-exempt housing bonds - Tax-exempt interest earned on specified state and local bonds issued during 2009 and 2010 will not be subject to the Alternative Minimum Tax (AMT). In addition, financial institutions will have greater capacity to purchase tax-exempt state and local bonds.
  • Energy efficient housing - Grants for energy retrofits for federally assisted housing (Section 8), funding for energy efficiency and conservation block grants to states, and Increases in the residential tax credit through 2010 for certain energy efficient upgrades.

Comments

Yos Favorite said…
wonder where Uncle Sam to get all these money to save the economy.

1HitProperty

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