Wondering about the detais behind the 2009 "Stimulus" Law and what affects the real estate market in Central Pennsylvania? Here's a summary of the details:
BACKGROUND
The American Recovery and Reinvestment Act of 2009 (H.R. 1) was approved and signed into law on February 17, 2009. The Act is a $780 billion package.
Many elements of the National Association of Realtors® legislative housing agenda were incorporated into the Act. The President and congressional leaders have indicated that housing issues will be further addressed in upcoming legislation.
DETAILS
Homebuyer Tax Credit – The Act provides an $8,000 tax credit available to Lancaster County first-time homebuyers for the purchase of a principal residence between January 1, 2009 and December 1, 2009. This credit does not need to be repaid and may be claimed on a consumers 2008 or 2009 tax return. If any credit amount remains unused, then the unused amount is refunded as a check to the purchaser.
FHA, Fannie Mae and Freddie Mac Loan Limits – The Act reinstates the 2008 loan limits for FHA, Fannie Mae and Freddie Mac. These limits were equal to the greater of 125 percent of the 2008 local area median home price or $271,050 for FHA and $417,000 for Fannie and Freddie, with an overall maximum cap of $729,750. In 2008, the median sale price for homes in Lancaster County was $173,000.
Neighborhood Stabilization – The Act provides $2 billion in funding for the Neighborhood Stabilization Program, which funnels grants to local and state governments to assist neighborhoods facing a large number of foreclosures. The funds may be used to purchase, manage, repair and resell foreclosed and abandoned properties. After purchase, the homes must be used to assist individuals and families with incomes at or below 120 percent of the area’s median income. 25 percent of funds must be used for households with incomes at or below 50 percent of area median income.
Commercial Real Estate – The Act provides funding for state energy programs used to support commercial property owners’ investments in energy efficiency upgrades. Commercial property owners seeking to invest in alternate energy systems for onsite power generation will benefit from the U.S. Department of Energy Renewable Energy Loan Guarantees Program. Small businesses receive tax relief in the area of bonus depreciation and capital expenditures as well as the five-year carry back of net operating losses.
Rural Housing Service – The Act provides $500 million to existing USDA rural housing programs. The RHS maintains a guaranteed loan program and a direct housing loan program for those meeting the eligibility criteria. $270 million is allocated to the direct loan program and $230 million is allocated for unsubsidized guaranteed loans. This level of funding will provide for 192,000 additional homeowners.
Low Income Housing Grants – The Act allows states to trade in a portion of their 2009 low-income housing tax credits for Treasury grants to finance the construction or acquisition and rehabilitation of low-income housing.
Energy Efficient Housing Tax Credits and Grants – The Act provides $6 billion in energy efficiency and conservation grants to local and state governments. Through 2010 homeowners will be able to claim a 30 percent tax credit for purchases of new furnaces, windows and insulation. The Act provides an additional $5 billion to modernize America’s electricity grid and install smart meters on homes that help save consumers money. The Act also provides $5 billion for weatherization assistance for low-income households and $2 billion for federally assisted housing (Section 8) efficiency programs.
Transportation Investments – The Act provides $46.7 billion to local and state governments for surface transportation projects such as highways, bridges, transit and rail. The Lancaster County Planning Commission estimates $34 million in funding for bridges and highways and $21 million for transit programs will be directed to projects in Lancaster County. LCAR supports increased spending on transportation infrastructure as a means of promoting smart growth, lessening traffic congestion and improving the quality of life, and thus the value of real estate, in Lancaster County.
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Coldwell Banker Select Professionals, based at 1000 North Prince Street in Lancaster and with additional offices in Lebanon, Hershey & York can be reached at 717-735-8400 or at www.cbselectpros.com. Coldwell Banker Select Professionals serves the Lancaster PA real estate, York PA real estate, Hershey PA real estate, Harrisburg PA Real Estate, Lebanon PA real estate markets with local offices and agents.
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