American Recovery and Reinvestment Act of 2009
The $790 billion stimulus package signed by President Obama today increases the home buyer tax credit to $8,000, drops the repayment feature, reinstates last year’s 2008 loan limits for FHA, Freddie Mac, and Fannie Mae loans, and provides $2 billion in additional funding for states and localities to be used to purchase, manage, repair and resell foreclosed and abandoned properties.
Homebuyer Tax Credit. The bill provides for a $8,000 tax credit that would be available to:
• First-time home buyers
• Home buyers who haven’t owned in at least three years (falls under First-time buyer definition)
This credit may be used for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009.
The Home-buyer Tax Credit does not require repayment for buyers who hold onto their property for at least three years.
The credit will be claimed on a tax return to reduce the purchaser’s income tax liability. If any credit amount remains unused, then the unused amount will be refunded as a check to the purchaser.
Other features of this very important and transformative bill include:
Rental assistance. Up to $1.5 billion to provide short-term rental assistance and other aid for families during the economic crisis.
Low-income housing grants. Allow states to trade in a portion of their 2009 low-income housing tax credits for Treasury grants to finance the construction or acquisition and rehabilitation of low-income housing, including those with or without tax credit allocations.
Tax-exempt housing bonds. Tax-exempt interest earned on specified state and local bonds issued during 2009 and 2010 will not be subject to the Alternative Minimum Tax (AMT). In addition, financial institutions will have greater capacity to purchase tax-exempt state and local bonds.
Energy efficient housing. Grants for energy retrofits for federally assisted housing (Section 8), funding for energy efficiency and conservation block grants to states, increases in the residential tax credit through 2010 for certain energy efficient upgrades and $5 billion to weatherize low-income homes.
Transportation infrastructure. Up to $29 billion for highway construction projects, $8 billion for rail projects.
Lynn Robertson
Real Estate Broker
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