The Senate is currently working on passing the 2009 stimulus bill.  The House passed their version last week.  There are many parts to this bill, which is why it is close to $900 billion and there is a lot of wasteful spending in the bill, however, there are two excellent parts of the bill.  Congress is now working to get some of the waste out of the bill.

The first part of the bill I agree with are the tax cuts...they are always good.  However, this blog is about the Home Buyer tax credit.  In 2008, Congress passed the $7,500 tax credit for First Time Home Buyers.  Unfortunately, it had little affect on the housing market since it had to be paid back and was basically a 15 year interest free loan.  Congress realized its ineffectiveness, therefore, the introduction of the 2009 stimulus bill.  While the bill still needs to be finalized by the Senate and approved by the President, some form of this stimulus bill will be approved.

The one thing that both parties have agreed to is the $15,000 tax credit for ALL home buyers.  The tax credit will equal 10% of the sales price or $15,000, whichever is less.  And, the credit will not have to be paid back as long as the home is not resold within 24 months of the purchase.

Some of the great features are:

1.  Increased tax credit from $7,500 up to $15,000.

2.  It will not have to be repaid unless home is sold within 24 months of the purchase price.

3.  It is for everyone that purchases a primary dwelling, whether they are a first time home buyer or not.

4.  The income limits will be removed. 

5.  It will extend the tax credit from July 1, 2009 to September 1, 2009.

6.  It will take affect the day the President signs the bill.

I do not like to mortgage our children and grandchildren's future, but some of this is necessary.  A tax credit in the 1970s was similar to this tax credit and helped stabalize the housing market as I feel this will help, too.  Some experts say this could have a 10% increase in 2009 real estate sales.  This will stablelize values and hopefully rejuvenate our economy.

Please remember that this bill has not been finalized and is subject to change.  However, I feel some version of this bill will be signed into law.  This along with current interest rates will make it an excellent time to buy.  Don't be one to miss the bottom.... the bottom may be here.

For all your purchase and refinance needs, feel free to contact me at 410-248-1762 or bob.lowery@prosperitymortgage.com. 

Bob Lowery, Mortgage Consultant

Prosperity Mortgage Company

410.248.1762 Tel

443.653.1720 Mobile

Bob.Lowery@prosperitymortgage.com