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Housing Stimulus Package Update!

Housing Stimulus Package Update:

National Association of Realtors asked for the following in November, 2008:

          Raise loan limits in high cost areas.

          Make the $7,500 tax credit NOT a loan.

          Find ways to push interest rates down.

          Provide help to foreclosure and short sale problems.

What was achieved?

          Loan limits will be raised to $727,000 in high cost areas.

          Tax credit will be raised to $8,000 with NO payback feature.

          Interest rates have come down 125-150 basis points.

          $50 billion in the stimulus bill is set aside for foreclosure mitigation. Troubled Asset Relief Program and Tax Analysis and Revenue Forecasting will be used to mitigate foreclosures through a government guarantee, drive down interest rates by purchasing another $200-$300 billion of mortgage paper from Government Sponsored Enterprises (Fannie Mae, Freddie Mac and Federal Home Loan Banks) thereby freeing them up to do the same with new mortgages.

          Fannie Mae has agreed to raise the cap on investment properties eligible for loans from 4 to 10.

What we keep:

          Mortgage interest deductibility, real estate tax deductibility, and the $250,000/$500,000 cap gains exclusion (an overall package worth more than $100 billion and for some a very attractive funding source for their pet projects).

What we did not get:

          Tax credit $15,000

          Homebuilders credit $22,000 as well as 5 year loss carry-back deal.

Although, we cannot complain over the loss of something we never had in the first place.

 

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