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Stimulus Update
Last week, the US House of Representatives passed the American Recovery and Reinvestment Act (H.R.1). This bill has some key provisions that will stimulate the housing market: It will restore FHA, Fannie Mae and Freddie Mac to 125 percent of median home prices - up to $729,750 It would eliminate the repayment provision for the $7,500 first time home buyer tax credit It expands tax-exempt housing bonds
Two days ago, the Senate approved an amendment to their bill that offers up to a $15,000 tax credit to people that purchase a home in the next year. The credit would apply to anyone, not just first time homebuyers and you would not need to repay the credit. The credit is based on 10% of the purchase price of the home and the credit is spread over two years. So for example, if you buy a house with a purchase price of $300,000, you would qualify for the maximum credit of $15,000. The first year you claim the credit, you receive $7,500, and you would receive the remaining $7,500 the next year.
Once the Senate passes a bill, we expect lawmakers to hold a conference to work out the differences, before sending it along to the President. The President wants a finished product by February 16, 2009.
