Housng and the Obama Stimulus Package

I've studied the parts of the stimulus package with a direct impact on the housing situation. I have come to realize that there is much more to come that will help unclog the pipeline and get capital flowing into housing again. Here are some of the current highlights:

The loan limits will be raised to $727,000 in high cost areas.

The tax credit will be raised from a $7,000 tax credit that has to be paid back to an actual credit of $8,000 that does not have to be paid back.
Interest rates have come down 125-150 basis points

The bill has over $50 billion in it for foreclosure mitigation. Geitner's Treasury plan signals that the second half of TARP and TALF will be used to mitigate foreclosures through a government guarantee. They will drive down interest rates and buy another $200-$300 billion of mortgage paper.

Fannie Mae has just agreed to lift the cap of 4 investment properties eligible for loans and raise it to 10.

What the housing industry did have, was preserved. This is something some tend to forget. Everything goes onto the table when these negotiations take place. Mortgage interest deductability, real estate tax deductability, and the $250,000/$500,000 capital gains exclusion will all remain in effect.

There was discussion of a $15,000 tax credit and a $22,000 Homebuilders credit as well as a 5 year loss carryback deal, but these ideas were considered too rich for this program.

David J Edwards
REALTOR
Keller Williams Realty Southeast Sound
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David J Edwards is a full time real estate agent and REALTOR with Keller Williams Realty specializing in Residential Real Estate for buyers and sellers.