Published: February 23, 2009 08:46 am      

Home buyers can put Stimulus Bill to work

CLINTON — The “American Recovery and Reinvestment Act of 2009,” which is commonly referred to as the Stimulus Bill, recently passed by Congress and signed by President Obama on Feb. 17, provides some significant incentives and benefits for home buyers and current home owners.

For first time home buyers who qualify for the new first time home buyer tax credit, the bill provides a tax credit equal to 10 percent of the purchase price of a single family principle residence up to a maximum credit of $8,000.

The bill signed by the President on Feb. 17 improved the previous first time home buyer tax credit by increasing the maximum credit from $7,500 to $8,000 and also by not requiring that the tax credit be paid back as long as the buyer occupies the home for at least three years. The previous tax credit was required to be paid back. The credit starts to phase out for individuals with adjusted gross incomes above $75,000 and above $150,000 on joint tax returns. This revised tax credit would apply to purchases between January 1, 2009 and December 1, 2009.

The bill also provides an additional half a billion dollars to the existing USDA Rural Housing program. This program provides both a guaranteed loan program and a direct housing loan program for those people who meet the program’s eligibility criteria. The direct loan program will receive $270 million through the bill while $230 million will be allocated for unsubsidized guaranteed loans. Advocates of the program report that this level of funding could provide for an additional 192,000 homeowners nationwide.

Existing homeowners thinking about making upgrades and improvements to their homes could also get some benefits from the bill.

In an effort to promote energy efficiency, the bill provides qualified homeowners with up to a 30 percent tax credit for the purchases of new furnaces, windows, and insulation through 2010 with ceilings on the amount of credit taken.

These are just a few of the provisions of the bill that may provide some assistance to first time home buyers as well as current homeowners. As with any tax law change, check with a tax adviser if there are any questions regarding utilizing any of these provisions.



Matthew Brisch is a licensed Realtor in the states of Iowa and Illinois and is a partner at Howes and Jefferies Realtors. For more information regarding these programs, contact a Realtor at Howes and Jefferies.