What the Housing and Economic Recovery Act of 2008 Means to You
The passage of the Housing and Economic Recovery Act of 2008 should not only benefit hundreds of thousands of home buyers and sellers, it also marks the beginning of the next real estate cycle. Two of the most significant provisions in this legislation are first-time home-buyer tax credits and permanent increases to FHA loan limits.
In order to qualify for the first-time home-buyer tax credit of 10% of the home purchase price (up to $7,500), buyers must not have owned property within the last three years and must make their purchase between April 9, 2008 and July 1, 2009. The credit phases out for individuals making more than $75,000 or joint filers making more than $150,000 a year. The credit functions much like an interest free loan from the government. It is not a tax deduction and must be paid back in equal installments over 15 years.
Increasing FHA loan limits to as much as $625,000 (varies by area) will help many potential borrowers qualify for affordable mortgages. Loan limits in our area are $xxx,xxx.
While there is a good selection of homes in the more affordable price ranges, there is not an overabundance. Homes in the more affordable price ranges will only go up over this next ten-year housing cycle. The ripple effect of increased sales in the more affordable markets will eventually cause a chain reaction of sales up the price points, helping to stabilize the entire housing economy.
If you are interested in learning more about how this new legislation could affect your and your home, please feel free to contact me. I would be happy to answer your questions or put you in touch with a Response Mortgage consultant who can discuss financing options with you.
Click here to download and easy to follow chart describing the act.
Click here to download a Q & A provided by the National Association of Realtors.