Hard to know exactly what it means....most of our congressmen/women didn't read the bill, so they aren't the ones to ask!
Here is my take on the bill:
1) Loan limits will be raised in high cost areas. Conforming loan limits are the same despite where you buy your home. Adjustments will be made to allow conforming loan limits to be stretched in areas of higher cost homes. These loan limits will be increased to $727,000 in high cost areas.
2) The $8,000 tax credit on a new home will be just that, a tax credit. Earlier versions of the bill allowed for a $7,500 credit, that had to be paid back.
3) Lowering of interest rates by .125 per cent.
4) $50 billion will go towards foreclosure mitigation.
Here is the best thing - these won't be touched:
1) Mortgage Interest deductibility will remain
2) The $250,000 individual and $500,000 couple exemption in taxes when you sell your home and you receive some of your equity back. The Obama plans when campaigning were to take this exemption away and tax your capital gains/equity on your home as income. This would have been bad for real estate...and bad for Americans who had much of their wealth tied up in the equity of their homes.
The main stimulus needed to bring things back are for capital to begin flowing once again and for people to have confidence that the market has bottomed. People don't like to buy homes when prices are falling....they would rather miss the bottom and lose some money on the next uptake rather than see their equity disappear within weeks of buying their homes.
Let's hope the last half of 2009 is good for the recovery of the Twin Cities real estate market.
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