The American Recovery and Reinvestment Act of 2009 reinstates last year's 2008 loan limits for FHA, Freddie Mac, and Fannie Mae loans. These limits were equal to the greater of 125% 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. For the few areas where the 2009 limits were higher, the higher limits will apply. In addition, the bill includes language providing the HUD Secretary with the discretion, if warranted, to increase the loan limit for any Hsub-areaI, i.e. an area smaller than a county. The Secretary's discretion is again limited by the $729,750 cap. These 2009 limits will expire December 31, 2009. For Santa Clara County, loan limits will be $729,750.
The Act is intended to provide a stimulus to the U.S. economy in the wake of the economic downturn brought about by the subprime mortgage crisis and the resulting credit crunch. The Act includes federal tax cuts, expansion of unemployment benefits and other social welfare provisions, and domestic spending in education,
health care, and infrastructure, including the energy sector. Some of the tax relief for individuals include:
• New payroll tax credit of $400
per worker and $800 per couple
in 2009 and 2010. Phaseout
begins at $75,000 for individuals
and $150,000 for joint
filers.
• Alternative minimum tax: a one
year increase in AMT floor to
$70,950 for joint filers for 2009.
• Expansion of child tax credit: A
$1,000 credit to more families
(even those that do not make
enough money to pay income
taxes).
• Expanded college credit to
provide a $2,500 expanded tax
credit for college tuition and
related expenses for 2009 and
2010. The credit is phased out
for couples making more than
$160,000.
• Homebuyer credit: $8,000
credit for all homes bought
between 1/1/2009 and
12/1/2009 and repayment provision
repealed for homes
purchased in 2009 and held
more than three years. This
only applies to first-time homebuyers.
• Home energy credit to provide
an expanded credit to homeowners
who make their homes
more energy-efficient in 2009
and 2010. Homeowners could
recoup 30 percent of the cost
up to $1,500 of numerous
projects, such as installing
energy-efficient windows,
doors, furnaces and air conditioners.
• Deduction of sales tax from car
purchases, phased out for
incomes above $250,000.
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