Stimulus Bill To Be Signed Tomorrow
Unless something completely unexpected happens, President Obama is expected to sign the American Recovery and Reinvestment Act of 2009 (better known as the Stimulus Bill) tomorrow, February 16, 2009. It’s a huge and mind-boggling piece of legislation, but the good news is that the part most affecting mortgages and real estate can be summed up by the following points:
The best news – an $8,000 tax credit for first-time home buyers that will not have to be paid back. That’s right. It’s non-refundable! This is an big change and improvement over the current $7,500 tax credit approved last year, which had to be paid back gradually over a period of 15 years and was set to expire in July 2009. Here’s how the $8000 tax credit works : “First-time home buyers”/home-buying/learn/why: (defined as anyone who hasn’t owned a home for at least three years) who purchase a home between January 1 and December 1, 2009 will receive a refundable tax credit of up to $8000. The tax credit amount is based on 10% of the purchase price of your home, up to $8,000. In other words, homes valued over $80,000 will only get the max $8,000 tax credit. The credit doesn't have to be repaid, but homeowners much keep their homes for at least 3 years to qualify.Great news for seniors – limits on reverse mortgage HECM loans will rise to $625,500 until the end of 2009 – at which time the new limit will be reviewed and possibly extended (but it's not guaranteed). The current limit (until tomorrow) is $417,000, so this opens up reverse mortgage options for many seniors.Pretty good news – confirming conforming loan limits (that sounds like a tongue twister) to $729,750 in high-cost areas for “FHA loans:/home-loans/fha-loan. That means that homes in areas with more expensive real estate can continue enjoying the benefits (low mortgage rates with easy qualifying) of FHA loans.Uplifting news – financing for states for construction and rehabilitation of low-income housing.Spreading the wealth news – Funding for rural housing loan programs, with up to 100% financing.Innovative news – Grants for energy efficient housing retrofits, and tax credits for energy efficient upgrades expanded through 2010.
Again, it would take something very unexpected to stop the stimulus bill from being approved. From all signs, it’s full steam ahead. The White House blog reports today that the President is very excited about the bill.
Now we all just have to hope it works as intended and hope it helps the real estate market rebound from its current slump.
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