On Tuesday, February 17, 2009, the American Recovery and Reinvestment Act of 2009 (H.R.1) was signed into law by President Obama. The $787 billion economic stimulus package will impact a vast number of areas in the U.S. economy and the President is hopeful that the broad spectrum spending injection will initiate upward movement in all economic and geographic areas of the United States.
The real estate market benefited from a number of the Act's provisions.
(1) Homebuyer Tax Credit – "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 chart that explains the benefits - National Association of Realtors First Time Home Buyer Tax Credit Chart.
(2) FHA, Fannie Mae and Freddie Mac Loan Limits – "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."
(3) Neighborhood Stabilization – "Division A, Title XII of the bill provides $2,000,000,000 in additional funding for the Neighborhood Stabilization Program (NSP). The NSP was created by the Housing and Economic Recovery Act of 2089 (Public Law 110-289) to provide grants through the Community Development Block Grant program (CDBG) to states and localities to address the problems that can be created when whole neighborhoods are decimated by foreclosures. The funds can be used to purchase, manage, repair and resell foreclosed and abandoned properties. In addition, the funds can also be used by states and localities to establish financing methods for the purchase and redevelopment of foreclosed properties."
(4) Commercial Real Estate – "Commercial real estate is impacted primarily through those provisions of the bill focused on green building and energy efficiency as well as business tax incentives. H.R. 1 provides significant funds for state energy programs, which could be used to support commercial property owners' investment in energy efficiency upgrades while commercial property owners seeking to invest in alternative energy systems for onsite power generation would benefit from the Department of Energy Renewable Energy Loan Guarantees Program."
(5) 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."
(6) Rural Housing Service - "The bill provides an additional $500 million to existing USDA Rural Housing programs. The RHS provides both a guaranteed loan program and a direct housing loan program for those meeting the program’s eligibility criteria. The direct loan program will receive $270 million while $230 million will be allocated for unsubsidized guaranteed loans. It has been reported that this level of funding would provide for an additional 192,000 homeowners."
The above selected provisions of The American Recovery and Reinvestment Act of 2009 are listed from the National Association of Realtors website located at:
http://www.realtor.org/government_affairs/gapublic/american_recovery_reinvestment_act_home
The Final Text of Conference Reports on H.R.1-The American Recovery and Reinvestment Act of 2009 can be found at the following location:
http://www.whitehouse.gov/the_press_office/arra_public_review/
Please let us know if you have any questions. There are great benefits available for first time home buyers and those buyers who have not purchased a home in the last 3 years.
The real estate market benefited from a number of the Act's provisions.
(1) Homebuyer Tax Credit – "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 chart that explains the benefits - National Association of Realtors First Time Home Buyer Tax Credit Chart.
(2) FHA, Fannie Mae and Freddie Mac Loan Limits – "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."
(3) Neighborhood Stabilization – "Division A, Title XII of the bill provides $2,000,000,000 in additional funding for the Neighborhood Stabilization Program (NSP). The NSP was created by the Housing and Economic Recovery Act of 2089 (Public Law 110-289) to provide grants through the Community Development Block Grant program (CDBG) to states and localities to address the problems that can be created when whole neighborhoods are decimated by foreclosures. The funds can be used to purchase, manage, repair and resell foreclosed and abandoned properties. In addition, the funds can also be used by states and localities to establish financing methods for the purchase and redevelopment of foreclosed properties."
(4) Commercial Real Estate – "Commercial real estate is impacted primarily through those provisions of the bill focused on green building and energy efficiency as well as business tax incentives. H.R. 1 provides significant funds for state energy programs, which could be used to support commercial property owners' investment in energy efficiency upgrades while commercial property owners seeking to invest in alternative energy systems for onsite power generation would benefit from the Department of Energy Renewable Energy Loan Guarantees Program."
(5) 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."
(6) Rural Housing Service - "The bill provides an additional $500 million to existing USDA Rural Housing programs. The RHS provides both a guaranteed loan program and a direct housing loan program for those meeting the program’s eligibility criteria. The direct loan program will receive $270 million while $230 million will be allocated for unsubsidized guaranteed loans. It has been reported that this level of funding would provide for an additional 192,000 homeowners."
The above selected provisions of The American Recovery and Reinvestment Act of 2009 are listed from the National Association of Realtors website located at:
http://www.realtor.org/government_affairs/gapublic/american_recovery_reinvestment_act_home
The Final Text of Conference Reports on H.R.1-The American Recovery and Reinvestment Act of 2009 can be found at the following location:
http://www.whitehouse.gov/the_press_office/arra_public_review/
Please let us know if you have any questions. There are great benefits available for first time home buyers and those buyers who have not purchased a home in the last 3 years.
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