The signing of the American Recovery and Reinvestment Act, better known as the stimulus package, contains several positive provisions to energize the housing market. The stimulus is expected to play a significant role in the recovery of the housing market.
PROGRAM HIGHLIGHTS:
*First time home buyer tax credit was raised to $8000: If you purchase your home between January 1, 2009 and December 1, 2009. Home buyers must live in the home for 3 years without selling in order to be eligible. Use of credit reduces the purchaser's income tax liability.
*Tax credit 2nd loan option: If you qualify for the first time home buyer credit and want to use it to purchase your first home in 2009, Idaho Housing has a new program that will allow you to borrower the credit as a down payment on your new home. Call for details
*Mortgage rates are expected to continue to fall based on the buying of another $200-300 billion of mortgage papers from the GSEs, this will free up agencies to purchase additional mortgages: Falling mortgage rates, as the result of improving liquidity and credit in the mortgage market, will lower monthly mortgage payments for buyers and home owners.
*Fannie Mae has raised its total of investment properties financed to 10: The higher limit means investors can now obtain financing on up to 10 properties versus the previous 4.
*Mortgage Interest deductibility, Real estate tax deductibility, and the $250,000/$500,000 cap on tax free gains were all preserved. The preservation of these important tax breaks continue to underscore that buying or selling a home remains a great tax shelter for individuals and families.
*Loan limits up to $729,750 have been reinstated in high cost areas: This allows borrowers to avoid a higher cost “jumbo” loan and instead allow them to get conforming loans with lower rates.