The Stimulus Package

Today may be the day that the American Recovery and Reinvestment Act of 2009 (aka the Stimulus Package) is passed; the Senate is voting on it right now. It is anticipated that it will be on President Obama’s desk to sign into law this weekend. While we don’t have all of the information about this Act, here are some highlights:

Contains a record-setting $10.472 billion in funding for the USDA Guaranteed Rural Housing Program to insure Rural Housing mortgages. These funds are in addition to funds the program has already received through the Continuing Resolution, as well as additional funding expected from Fiscal Year 2009 Appropriations legislation or further Continuing Resolution legislation. Again: WE HAVE NEVER STOPPED CLOSING AND FUNDING USDA RURAL HOUSING LOANS AND WILL CONTINUE TO DO THEM EVEN WHILE OTHER LOCAL LENDERS HAVE STOPPED AND ARE TELLING YOU THEY ARE OUT OF MONEY! There was a rumor that the USDA guarantee fee was going up as part of the Stimulus Package; it will remain unchanged at 2.0% for purchase transactions. There was a tax credit increase requested by the Senate; it has since been scaled down to $8,000 (or 10% of the value of the home, which ever is lower) from $15,000, which is still $500 above where it currently is. This is for any first time homebuyers who purchase homes from the start of this year until the end of November. It starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000. Buyers will have to repay the credit IF they sell their homes within three years.

 More details will be provided to you concerning the impact of the Stimulus Plan once we go through the final version that is signed into law. Until that time, none of these are in effect yet.

First Time Buyer? Buy a House with NO MONEY DOWN and get the $7,500 Tax Credit for 2008!

HR3221, the bill signed into law about a month ago, allows for up to $7,500 in tax credits to be given to first time homebuyers that purchase a home between August 9, 2008 and July 1, 2009. This credit will be deducted from your 2008 tax return. It does have to be paid back but it is paid back over 15 years, which would be $500 a year added to your tax liability for the next 15 years as it is interest-free when repaying it.

If you couple this with a USDA Rural Housing Loan (mortgage), you can get into a property with no out of pocket money AND get $7,500 taken from your tax liability for this year! Instead of waiting until you file your tax return next year, you can actually change your withholding for this year and start reaping the benefit of the credit right away.

The increased amount of your take home pay can help with buying furniture for your home, upgrading the appliances, replacing flooring, etc. What a great time to buy a home!

USDA Rural Housing loans can be used on new construction or new homes and the rates are VERY low (5.5% for a 30 year fixed rate with no money down as of yesterday!)

If you are looking to purchase a home in Florida, Alabama, Georgia, North Carolina, South Carolina, or Tennessee, feel free to apply here or you can email me. Northstar Mortgage is guiding you home!