When President Obama signed the American Recovery and Reinvestment Act last week the First-Time Homebuyer Tax Credit ended up with some major modifications. Here is a summary of the program as it now stands:
- The maximum amount of the credit has increased from $7500 to $8000. The amount is now the lesser of 10% of the cost of the home or $8000.
- All single family principal residences, including condos, co-ops, and townhomes, are eligible.
- The amount is credited directly toward your income tax liability. Purchasers will received a refund for any unused amount of the credit.
- Income limits do apply. The full amount of the credit is available if your adjusted gross income is no more than $75,000 ($150,000 jointly). Above the $75,000 income cap the credit phases out up to $95,000 ($170,000 jointly).
- The credit applies only to first-time home buyers or purchasers who have not owned a principal residence in 3 years.
- Purchasers who utilize revenue bond financing can still use the credit (this is a change to the old bill).
- No repayment is required for purchases between January 1, 2009, and December 1, 2009. This is also a revision to the previous bill.
- If you sell your home within 3 years of purchase the entire amount of the credit is recaptured on sale of the property.
In addition to the first-time homebuyer credit, the bill reinstates the 2008 loan limits for FHA, Freddie Mac, and Fannie Mae loans. It provides $2 billion in additional funding for the Neighborhood Stabilization Program, which provides grants to states and localities to address problems that can be created when whole neighborhoods are decimated by foreclosures.
Commercial real estate will be primarily affected through provisions of the bill which focus on green building, energy efficiency, and business tax incentives. HR 1 provides significant funds for state energy programs, which could be used to support commercial property owners' investment in energy-efficiency upgrades.
Commercial real estate will be primarily affected through provisions of the bill which focus on green building, energy efficiency, and business tax incentives. HR 1 provides significant funds for state energy programs, which could be used to support commercial property owners' investment in energy-efficiency upgrades.
The White House has launched a new Web site, Recovery.gov, dedicated entirely to the 1,100-page American Recovery and Reinvestment Act. Click on the link to find out everything you wanted to know about the new bill!
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