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President Obama signs stimulus bill into law

Katie Wickham, Just Looking in Potrero Hill, San Fr...
Written by Katie Wickham, Just Looking in Potrero Hill, San Francisco
February 17, 2009 2:56 PM Home Buying
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Update!  As expected, President Obama today signed the $787 billion American Recovery and Reinvestment Act (aka "the stimulus") into law.  Here's a recap of how the stimulus bill became a law, and what the final plan means for home buyers.
  • First, the Senate and the House passed their own ideal economic recovery bills.  The approved Senate bill included a $15,000 homebuyer tax credit.
  • Congressional leaders met to combine the Senate and House bills into one piece of legislation. The $15,000 tax credit was reduced to a $8,000 homebuyer tax credit.
  • Details of the stimulus become public once the new plan is passed by both the Senate and House, including: 
    • Tax credit of 10% of the purchase price up to $8,000
    • Credit only valid for first-time homebuyers purchasing principal residence
    • Credit can be applied to purchases made from 1/01/09-12/01/09
    • Home purchased must be principal residence for 3 years or credit will be recaptured
    • Only applies when taxable income for the year is less than $75,000 (file single return) or 150,000 (file join return)  
 So will this be enough to heal the US housing market?  Add Trulia CEO Pete Flint to those who think we still need to do more to solve the housing crisis.  Plus, as the OC Register real estate blog showed, the stimulus has the least impact on price in states needing the most housing help.

Even the president said at the signing that this won't solve everything.  In fact, he'll be back on the national stage tomorrow unveiling a more detailed plan for TARP money to help with the foreclosure crisis.  In the meantime, this definitely gives us hope.
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By Julie Broderick,  Tue Feb 17 2009, 15:11
I don't like that this bill was pushed through before anyone had a chance to read it, I hope it's not full of pork, it was certainlly not done in the "transparent" fashion that the president promised but I remain hopeful that it's at least some attempt at a solution. There is definately releif for many people who need it. I'm happy the first time homebuyer has been continued and improved.
By Sharron Kelley,  Wed Feb 18 2009, 17:42
I have been selling Real Estate in the Northern Suburbs of Chicago for 24 years and I have never seen a market like this one. The problem with this bill is that it will not help reduce the current home inventory that we now have. The credit markets are way to tight to get loans, so few are able to move. The entire industry is stalled and this bill will not move it along. I just do not understand why the goverment does not see that if the housing market does not move, it will and is shutting down many industries and job losses are at an all time high as it is. The origional bill would have at least given people incentive to move with a $15,000.00 credit to any buyer. When will politics start working for the people.
By Victoria CB Trees, Broker,  Wed Feb 18 2009, 18:28
I agree with Shelley, that any tax credit isn't going to help loosen up the lending for really qualified buyers. Really, what it might do is bring me lots more buyers (looking for the tax incentive), show lots more homes, write lots more offers, and mark them all Failed. Woo hoo! More work, less pay...
By Rosemary Chiaverini,  Wed Feb 18 2009, 18:58
The $8,000 tax credit is good but we need reasonable mortgage guidelines along with that.
By Jana Fornof,  Wed Feb 18 2009, 19:05
The incentive is what it is, but I personally do not think this will "heal" the current housing market. I don't even feel the market will receive a bump. How about a tax credit for responsible homeowners who pay their mortgage? Why can't we reward the good? I feel he, Mr. President can certainly, park AIR FORCE ONE for a start.
By Theresa,  Thu Feb 19 2009, 04:48
Im a first time homebuyer in the beginning process of waiting on an offer to be approved.I agree.We need help with the current home inventory and the first time homebuyer assistance.Both of these would give us great help!What is being done with the rest of the 15,000 if only 8,000 is going towards the tax credit?
By Tony Stefancic,  Thu Feb 19 2009, 08:33
Hi!
As a realtor, borrower and home owner.
The banking industry is the real problem. They're not loaning money... their loan modifications aren't working ... the banks are cutting credit on lines without notification.... forcing more owners to foreclose then they can't handle the processing of the foreclosure process. It's a mess!

Tony
By Amal Eche,  Thu Feb 19 2009, 09:57
Tony, Sharron and Jana, you are right on the money. Homebuyers have already the advantage of this huge inventory of homes. The real incentive would be to stabilize jobs. No incentive is good to encourage anybody to purchase a home when they feel their job is in jeopardy. I have prospect homebuyers that are able to buy but are holding off because they are not sure if they are keeping their job a year from now. This is a long process but in the meantime, I think we need to see something implemented to help people stay in their homes and avoid more foreclosures. Something that is real and that works!!
By Stephanie Lundin,  Thu Feb 19 2009, 10:30
I think this is a really positive start to our end goal to fix the current housing crisis. I also think that it is great to see so many Realtors passionate about what is going on, and I URGE all of you to talk to your local represenatives to get your voice heard. After all, we are the experts on housing, and they need our voice now more than ever so that they can take our suggestions for the next round of bills to be passed if this doesn't just ''fix'' our problems over night. It is easy to complain, but have you emailed your Senator to tell them what YOU think should be done?
Real Estate isn't just about numbers, it is about people and their families. This will never change and this multi-faceted stimulus plan is definintely going to boost the morrale of Americans who have been fearful of what the media has been telling them. They will re-focus on the opportunity side of things (fixed low interest rates/tax credits).
Home ownership is more about the home and less about the money, since as a renter OR a homeowner, you are stuck paying someone something. I think it is time to play the level headed optimist, as we truly can manifest our own destinies to some extent.
By Mark,  Thu Feb 19 2009, 10:31
I am in my home but not for long. I was a victum of the teaser loan. I wanted 180K to build on land i owned over 15 years. After breaking ground the lender called me back into his office and had me increase the sgft and ammmenities up to 360k for the same 800 month payment. After one year I owed 372K They were happy to change my morgage again for a fee of 2800 and a new payment of 2400 The change of 1800 amonth made me use my credit to make the house payment. Now My job is lost and my credit is currently good but I owe 55K on cards Money borrowed to make the payments.
The bank does not want to help I am told my 780 credit score of 30 years will drop to 300 and nobody will touch me.Even when a job comes along I will not be able to buy a home let alone a trailor.
We have two kids under the age of 9 and I am the only provider. How does this help me.
Mark A
By Rosa Villegas,  Thu Feb 19 2009, 13:03
I took out the $7,500 First time home buyer credit for 2008. Which, is really a loan. Now, they are offering First time home owner for $8,000 for 2009. And that makes me furious. I bought my home in 2008 when the market was worse and now my home has lost value. I don't understand why I have to repay the 7,500 first time homeowner credit but other's will get a break by not repaying the $8,000 for 2009.
By CJ,  Thu Feb 19 2009, 15:34
Mark,
Sorry to hear about your situation. Have you considered a lease-option (rent-to-own)?
If you are going to have to pay rent you might as well take a chance on a good deal using this method. Anything is better than renting (says me who wants to be a landlord!!)
Do some research and make sure the numbers work for you. Insist that the payments are reported to the credit bureaus to help raise your score.
Good luck.
By Etta,  Thu Feb 26 2009, 13:48
By EK 2/26/09 What help is offered to those already in their home who have been paying their mortgage but
are running into financial difficulty. Why has no one offered those folks(I'm one of them) a 3% mortgage rate
over 30 years or the remainder of their loan and allow a reduction of the monthly payment and thus freeing up
some spending money to go back into the economy. I'm a realtor and having difficulty right now meeting my
obligations. I need some help also.
By Jill Ball,  Thu Mar 19 2009, 09:51
Does this incentive apply to people who are building a home and are within the income gudielines or is it only included for buyers of reexisting homes?
JILL

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