Stimulus Bill Housing Tax Credit

Lehigh Valley First Time Home Buyers Get $8000.00!

The passing of the stimulus bill today just gave an $8,000 gift to first time home buyers. If a first time home buyer (or someone who has not owned a home in 3 years) purchases one between 01/01/09 and 12/01/09 they will be eligible for an $8,000 tax credit when they file their taxes next year.  

For instance, if the home buyer owes $2,000 in taxes they will actually get a refund of $6,000. This varies from the $7,500 tax credit given to home buyers in 2008. Although called a tax credit, it was actually an interest free loan paid back over 15 years. Today's tax credit is an actual tax credit and is not repayable. It is a gift from the government for purchasing a home.

Other important factors included in the Housing Market section of the Stimulus Bill were:

The FHA, Fannie Mae, and Freddie Mac 2008 loan limits were put back into place for 2009. At the end of 2008, they lowered the loan limits which hurt the higher end market. The Stimulus Bill sets the Lehigh Valley limits to $402,500 for FHA and $417,000 for Fannie Mae and Freddie Mac.

The Bill includes 2 Billion for Neighborhood stabilization and will provide various grants to states and localities to help offset the foreclosure problem.

It also includes a 30% tax credit on Energy Efficient upgrades to your home (up from 10%) such as furnaces, windows, and insulation. This credit will be available through 2010 and does include income restrictions.

Throughout the Lehigh Valley, there are many localities that fall under the USDA Rural Housing Program. The Stimulus Bill will provide an additional $500 million to their existing budget. If an area falls into the program it may be possible to get 100% financing for the home mortgage. The program does include restrictions based on incomes, number of dependents,...etc. More information is available on the USDA Rural Development website.

There are other provisions in the bill such as Broadband Deployment and Transportation Improvements. Although not directly tied to housing, these projects should help improve the areas where we work and live and increase the desire for home ownership.

With interest rates floating in the 5% range, Now is a Great Time To Purchase a Home!