We have heard a lot of talk about the $787 billion government stimulus package. Much of the package is still an unknown... the full details on the Foreclosure plan are not due out until early March, and that will take some time to filter down to the market. We do have details on some of the plan:

Here are some provisions individuals can take advantage of now.

1. Housing help. First time home buyers can get up to an $8,000 tax credit if they close by November 30, 2009. This credit does NOT have to be paid back if you own the home three years. It phases out for single taxpayers making over $75,000 and for married couples filing jointly making over $150,000 (adjusted gross income).
   Communities receive $2.0 billion to redevelop abandoned and foreclosed homes.
   In high-cost areas, the bill restores the $729,750 upper conforming loan limit for Fannie Mae, Freddie Mac and FHA loan guarantee programs.
2. Home improvement tax credits. For money spent to make homes more energy efficient, a 30% tax credit through 2010, up to $1,500.
3. Residential renewable energy tax credits. Dollar caps have been removed on the 30% residential credit for solar thermal, geothermal and small wind upgrades.
4. Income tax credit. This will be up to $400 for individuals earning up to $75,000 and up to $800 for married couples filing jointly with up to $150,000 in income.
5. Alternative Minimum Tax reduction. Exempts from the AMT up to $46,700 of an individual's and $70,950 of a couple's income in 2009.
6. Earned Income Tax Credit. For 2009 and 2010, goes from 40% to 45% of the first $12,570 earned by families with more than three children.
7. Higher education tax credits. For 2009 and 2010, a $2,500 per year tuition tax credit for all four years of college. It's now 40% refundable and covers textbook costs. The credit phases out for individuals making $80,000-$90,000 and couples earning $160,000-$180,000.
8. Hybrid vehicle tax credit. Increased to $7,500 for purchasing a plug-in hybrid vehicle.
9. Help for car buyers. In 2009, anyone purchasing a new vehicle for up to $49,500 can deduct state, local and excise taxes, as well as car loan interest. This is an above-the-line deduction that can be taken even if you don't itemize. It begins to phase out for single taxpayers making over $125,000 and couples over $250,000.

There are many more programs for individuals, businesses and states, as well as a future foreclosure relief program - let's hope they all work. This plan was estimated to be about 800 pages long, that's like reading 2 phone books.  I am sure the details of the plan will continue to leak out as the details come to light. #1 is a biggie for our industry. The $8000 is not a huge improvement over the previous $7500... but it has no recapture after 3 years in the house, that is great news.

Have a great weekend!

Rob

Robert Rauf

www.RobertRaufHomeLoans.com   or my blog: http://activerain.com/blogs/rrauf

(732)223-1630 x102

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