Will the Stimulus Bill Still Help Home Buyers?

The final version of the $789 Billion Economic Stimulus Bill that survived the Senate/House Reconciliation of their two bills must still be approved by both the Senate and the House, but still contains a few provisions that should help home buyers, particularly first time buyers.

Unfortunately, the Senate passed version of the bill which contained a $15,000 tax credit for all buyers of homes did not survive, however the previous $7,500 credit for first time buyers was increased to $8,000, and unlike the previous credit, will not have to be repaid over 15 years as the previous $7,500 credit had to. Homes must be purchased before December 1, 2009.

The bill does provide for a temporary increase in loan caps for loans by Fannie Mae, Freddie Mac and the Federal Housing Administration in high cost areas from $625,000 to the limit that was temporarily in effect last year of $729,750. This should reduce the cost of borrowing for loans less than $729,750.

These incenntives should be particularly attractive to first time home buyers that now enjoy an incredible opportunity to purchase their first home at reduced prices, unprecedented low interest rates, and the opportunity for the Federal Government to effectively pay for your closing costs.

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