Stimulating the Housing Market

As you probably already know President Obama signed the American Recovery and Reinvestment Act into law last week. A portion of this package affects the real estate industry. Below you will find a summary of the changes or new legislation that is now in place.

1. First Time Homebuyer Tax Credit.*
a. Maximum credit amount - $8,000
b. All principal residences eligible
c. First time homebuyer (3 year rule applies)
d. Program effective to December 1, 2009
e. No repayment of credit on homes purchased in 2009
*Other rules may apply. Consult a tax professional for full details.

2. Rural Housing Service
a. The bill provides an additional $500 million to existing USDA Rural Housing programs.
b. The RHS provides both a guaranteed loan program and a direct housing loan program for those meeting the program's eligibility criteria.
c. 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.

3. Missouri incentives
Missouri is also looking to provide some stimulus to the housing market on its own. The Missouri Housing Development Commission has turned the existing federal tax credit program into a down-payment program, in which first-time homebuyers in Missouri can use up to 6 percent of the home purchase price, or a maximum of $6,750of the credit, toward a down payment on a home. For more information on this program visit the Missouri Housing Development Commission online at http://www.mhdc.com/ and click on Tax Credit Advance Loan Program for homebuyers.

4. Other provisions that could help housing markets and communities include:
FHA, Fannie Mae and Freddie Mac Loan Limits
Neighborhood Stabilization
Commercial Real Estate
Rural Housing Service
Low Income-Housing Grants
Tax Exempt Housing Bonds
Energy Efficient Housing Tax Credits & Grants
Broadband Deployment