Stimulus Advances With Tax Credit Changes
This is excellent news for recent people buying a home in Eden Prairie, Chanhassen, Minnetonka and Plymouth as well as those looking to buy a home in Edina, Minneapolis, Maple Grove and other areas. In reality, it is a positive step for first-time home buyers nationwide.
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.
The NATIONAL ASSOCIATION OF REALTORS ® has sought removal of the repayment requirement because it discourages 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. Households that purchase in 2009 using financing assistance from state and local mortgage bonds will be permitted to use the credit as well.
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.
Source: NAR, AP, Washington Post, New York Times, Bloomberg, and Wall Street Journal.
{ 3 comments }
