$15,000 homebuyer tax credit, higher loan limits, lower rates in play
UPDATE: They have wiped it out of the new bill, this will not be part of the bill.
Working to accommodate the new, lower overall limit of the bill, negotiators effectively wiped out a Senate-passed provision for a new $15,000 tax credit to defray the cost of buying a home, these officials said.
The Senate today approved an $838 billion economic stimulus bill that includes a $15,000 homebuyer tax credit, just hours after President Barack Obama’s new Treasury secretary unveiled a multitrillion-dollar financial stability plan that includes $50 billion for foreclosure prevention programs.
A $15,000 homebuyer tax credit, higher loan limits for Fannie Mae, Freddie Mac and FHA, and government spending to lower mortgage rates are all in play as Congress and the Obama administration near agreement on an economic stimulus bill and financial stability plan for banks.
The Senate today approved an $838 billion economic stimulus bill that includes a $15,000 homebuyer tax credit, just hours after President Barack Obama’s new Treasury secretary unveiled a multitrillion-dollar financial stability plan that includes $50 billion for foreclosure prevention programs.
The financial stability plan may also lead to an expansion of existing efforts by the Federal Reserve to drive down mortgage interest rates by buying mortgage-backed securities and debt issued by Fannie Mae, Freddie Mac and Ginnie Mae.
The version of the economic stimulus bill passed by the Senate in a 61-37 vote relies less on government spending and more on tax cuts to kick-start the economy than the version passed by the House Jan. 28 (see story). Only two Republicans voted for the bill in the Senate — Sen. Arlen Specter of Pennsylvania and Maine’s Olympia Snowe — and all 37 “no” votes were cast by members of the Grand Old Party.
Differences between the two versions of H.R. 1, the American Recovery and Reinvestment Act of 2009, must now be ironed out in a conference committee.
The House version of the bill would restore the upper limits for Fannie Mae, Freddie Mac and FHA loan guarantee programs to $729,750 in high-cost housing markets, where they stood for much of 2008 before being reduced to $625,500 — a step endorsed by many real estate industry groups.
The House version of H.R. 1 also contains another provision backed by the housing industry — elimination of the repayment requirement on an existing $7,500 tax credit for first-time homebuyers that is scheduled to sunset on July 1. But the Senate version of H.R. 1 would go farther, increasing the tax credit to $15,000 and allowing all homebuyers purchasing a principal residence within a year of the bill’s enactment to claim it on their 2008 or 2009 returns.
The National Association of Home Builders welcomed the Senate’s move, saying a $15,000 tax break for all homebuyers could generate nearly 500,000 home sales and create more than 255,000 jobs.
See the entire story HERE
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