Many people have been asking if the economic stimulus was going to boost local real estate markets? Initially it appeared most of the legislation would be geared toward tax credits for first time home buyers. While this would be great news for many first time home buyers who were left out during the boom a few years ago. Falling housing prices and low mortgage rates are starting to make home ownership attractive again.
A $7500 tax credit had been offered for first time home buyers since April. It does now appear the amount will be raised to assist first time home buyers. Many of those who wisely kept their money out of real estate as the market fell, are seeing signs that now is becoming a strong time to buy. 30 year interest rates are currently around 5%.
Investors and those looking to purchase a 2nd or 3rd home seemed to be left out of the legislation for the economic stimulus. As it now stands the Senate will be voting on Tuesday to an amendment to the economic stimulus package. The amendment #253 offers some great breaks for all those looking to buy real estate.
Amendment #253 was put forth by Senator Ensign of Nevada,it is known as fix Housing First. Fix Housing First was a proposed amendment would definitely make real estate a very attractive investment again. Some of the highlights were, American homeowners would be able to refinance their current mortgages or finance the purchase of a new home for about 4 percent. On average, this means monthly payments would be $400 lower – a savings of up to $150,000 over the course of a 30-year loan.
Another plan offered was by Senator Johnny Isaakson of Georgia. His plan proposed to:
Expand the tax credit to all purchasers and would eliminate the current requirement that it be repaid
Propsed Items in Amendment #353 Fix Housing First
Extend eligibility for Federal Housing Tax Credit until December 31,2009
Monetizing the credit so it becomes available at closing
Allowing the credit to be used in conjunction with mortgages financed by state or local bonds.
Increasing the credit amount to 10 percent of the home price capped at 3.5% of the FHA loan amounts (geographically dependent) – ranging between approximately $10,000 – $22,000
No matter what the final on Tuesday any of these propositions would greatly increase the financial incentive to own real estate.