A $15,000 gift for homebuyers?

[SpursFanFirst]

http://realestate.msn.com/article.aspx?cp-documentid=17198334&gt1=35000

The U.S. Senate approves an amendment to the economic stimulus package that would provide a tax credit of up to $15,000 for homebuyers who purchase a primary residence in the coming year. But economists are skeptical tax credits will prove stimulative.

By The Wall Street Journal

Congress is readying a stimulus package that could include some generous incentives for homebuyers.

The Senate added to the $900 billion stimulus bill on Wednesday a home purchase tax credit of $15,000, or 10% of the purchase price. If it's included in the bill that goes to the White House, that would represent a big gain not just for potential buyers, but also for the home builders and real-estate agents' groups that have aggressively promoted such a proposal for months as part of their "Fix Housing First" lobbying effort.

The second plank of that lobbying effort — a proposal for federally subsidized 4% interest rates on 30-year fixed-rate mortgages — isn't in the bill, but Senate Republicans are pushing for such a buy-down to spur home sales. Already, the Federal Reserve Bank has tried to lower interest rates by buying up securities backed by mortgages. However, after 10 straight weeks of declines, interest rates have edged up slightly in recent weeks.

Policymakers will also consider increasing limits on loans eligible for financing from government-backed mortgage entities to as high as $729,750 in the nation's most expensive housing markets. The stimulus bill that passed in the House last week included the provision.

Discuss: Would a $15,000 tax credit spur you to buy a home?

The Senate on Wednesday also approved $2 billion for state agencies to finance affordable housing.

Economists are skeptical that a builder tax credit or interest rate subsidies will stimulate the economy. Indeed, some argue encouraging the construction of new homes will only prolong the pain. "It is targeted not to the people who need help but an industry that wants a huge subsidy," said Thomas Lawler, an independent housing economist. "Why give an unbelievable gargantuan subsidy only to people who buy a home? What about renters who are in more dire straits?"

Proponents of a tax credit point to similarly structured subsidies that Congress approved in 1975. The program gave qualified buyers a 5% credit up to $6,000 and brought down interest rates by around 1.5%, to 7%. But critics say that the analogy is misleading because the U.S. was exiting a recession that had been induced by oil prices, not a slide in home values.

"By artificially increasing prices we are encouraging more building," says Harvard economist Ed Glaeser, who chided the Republican Party in a WSJ op-ed on Thursday for embracing interest rate subsidies.

By Nick Timiraos, The Wall Street Journal

If this actually happens, this would be huge.
But, I'm not holding my breath.

[TDMVPDPOY]

If this actually happens, this would be huge.
But, I'm not holding my breath.

we had that down here for 2-3 years now....that credit doesnt do much...all it does is could cover ur stamp duty/realtor fees, and drive the price up for propertys since there be a new group of buyers in the market.

its AUS$21k down here, and runs out end of this financial year....:( , they had a hard capped on it where you must be over 18 years old, or rich families will just rort the system buying properties under their childrens name who is under age. it also doesnt help when u got a growing population and govt isnt releasing new land for residential development.

[ChumpDumper]

Is there some provision to make banks actually loan the money? I thought that was the big problem these days. I guess the second provision is supposed to accomplish that, but they sure seem gunshy.

That said, I'll probably start looking into buying if it all comes to pass. I was considering it anyway, but I figured there wasn't a rush.

[LnGrrrR]

Forget that. Maybe if I get orders to someplace nice, but I'm hoping to go overseas.

The market will be depressed, by most accounts, for all of 2009. No rush.

[SpursFanFirst]

Is there some provision to make banks actually loan the money? I thought that was the big problem these days. I guess the second provision is supposed to accomplish that, but they sure seem gunshy.

That said, I'll probably start looking into buying if it all comes to pass. I was considering it anyway, but I figured there wasn't a rush.

You add that possible $15000 to the super low rates right now, and that's a huge deal.
I checked with Countrywide a couple months back, and they were offering me 5%. I wonder what the rate would be now from them.

As far as the actual loans go, the banks aren't doing 100% loans or any variation of 100% loans (80/20, 85/15, etc).

In order to get an FHA loan, I believe the rate you now HAVE to put down is at least 3.25%. It was raised from 3% back in October.
Does anyone know for sure?

[FreeMason]

Rates will skyrocket once inflation takes off (more than it already has) right?

[ChumpDumper]

Rates will skyrocket once inflation takes off (more than it already has) right?I guess it depends on when/whether all the fed's money actually makes it out of the banks.

[DannyT]

keep us posted....hadnt heard about this.....:tu

[boutons_]

Repug help for (mostly well off, perfect credit) upper-class home buyers, trickle down bullshit again, but no Repug help for distressed homeowners.

Repugs say fuck 'em, I say fuck Repugs.

Repug ideology, enrich/protect the haves, expose/fuck the have-nots.

[ChumpDumper]

I haven't seen anything that addresses the alteration of terms of the ARMs that are still out there. I'm assuming that the ones that aren't in default have a decent rate now, but once rates go back up and inflation potentially goes WAY up, that could finish off those homeowners with those mortgages who have made it this far.

[CubanMustGo]

And, of course, if you made the mistake of buying a home 4 months ago, you get zippo.

[Nbadan]

In order to get an FHA loan, I believe the rate you now HAVE to put down is at least 3.25%. It was raised from 3% back in October.

Does anyone know for sure?

There is a first-time buyer incentive in San Antonio that will help you with closing costs or a down payment, this is why home sales in San Antonio continue to be flat rather than on it's death bed like home sales in most areas...but it may end soon...

[DannyT]

but do you have to pay that back if they help you with the closing cost or DP?

[SpursFanFirst]

There is a first-time buyer incentive in San Antonio that will help you with closing costs or a down payment, this is why home sales in San Antonio continue to be flat rather than on it's death bed like home sales in most areas...but it may end soon...

That would be awesome. Too bad it's just in SA.

[TDMVPDPOY]

but do you have to pay that back if they help you with the closing cost or DP?

its a credit rebate....so its free man at the expense of taxpayers/govt.

just wait another few months if theres any progress, they could increase it if not influencing buyers into the market. They might boosts it a further +7-10k for new homes built or just 15k for buying a home. Hence alot of construction comps out there adding other stuff into sweetened the deal like free $30k worth of stuff or building materials.

i was looking at a display home.....if they give me all the furniture in the house free? i would sign on the dotted line.....most of the time these furniture are rented.....

[DannyT]

thats whats up....I know they are incentives but I just didnt kow if they some how fuck you in the end or add it to your home cost....sounds really sweet thats all

[ducks]

Privately, Democrats in Congress have been critical of Obama and his aides for failing to counter the Republicans more effectively. In recent days, the president has sharpened his rhetoric against unnamed critics of the bill whom he accused of trying to re-establish the "failed policies" of the past eight years.

Despite the struggle, some Republicans seemed to sense the White House would ultimately prevail, and sought political mileage.

Obama "could have had a very, very impressive victory early on," said Sen. John Cornyn of Texas, who heads the Senate Republican campaign committee. "But this is not turning out to be an impressive victory. it is turning out to be a little bit of a black eye."

[TDMVPDPOY]

thats whats up....I know they are incentives but I just didnt kow if they some how fuck you in the end or add it to your home cost....sounds really sweet thats all

it doesnt really cost that much to build a house as compared to buying the land, it depends in ur budget also. you can buy land and buy some used house for $1 on ebay, and pay +$10k to get it transfered to ur land and pay contractors to build the foundation and plot the house onto it......

most of the time that rebate only covers ur stamp duty tax/paper work fees. Then again the govt wouldnt care cause you and me know OBAMA is going to raise land tax which will make up for the rebate. So if you own a investment property ur fucked, if you own a small business...rent and land tax fucks you up.

All of this is bullshit anyway, you know why? it only protects realtor/real estate agents/builders jobs....when the govt is doing shit to protect jobs in other industries.

[BradLohaus]

And when these people can't pay their mortgages we'll go to 30K for the next batch.

[Aggie Hoopsfan]

Repug help for (mostly well off, perfect credit) upper-class home buyers, trickle down bullshit again, but no Repug help for distressed homeowners.

Repugs say fuck 'em, I say fuck Repugs.

Repug ideology, enrich/protect the haves, expose/fuck the have-nots.

Yes, offering 10% tax credit up to $150,000 is clearly biased towards people buying homes up north of 300-400K.

Idiot.

[AFBlue]

There's already a credit out there for $7,500 that expires this July...is this the same concept, just more money?

[SpursFanFirst]

There's already a credit out there for $7,500 that expires this July...is this the same concept, just more money?

What is this credit? Do you have a link?
Also, going by your name, I'm assuming you're in the military. Is this a military discount, or is it available to everyone?

[AFBlue]

What is this credit? Do you have a link?
Also, going by your name, I'm assuming you're in the military. Is this a military discount, or is it available to everyone?

I heard it mentioned one morning on NPR, though I don't have a link for you. Actually I'm getting ready to sell my house and move, so I was going to do more research on it, before I heard about the $15K credit.

To my knowledge it's not a military thing...and if it were, I may or may not have been eligible for it (anonymity is great ;) ).

[AFBlue]

Just did some quick google research and found out I'm ineligible...it's for first-time buyers. Not sure if you're in the same boat, but I think the $15K credit is for any home-buyer purchasing a "primary residence".

I wonder if I will be able to convince the government that the home I'm attempting to buy is going to by my "primary residence" if I still have another house in Ga that I can't sell!?!?!

[CubanMustGo]

What is this credit? Do you have a link?
Also, going by your name, I'm assuming you're in the military. Is this a military discount, or is it available to everyone?

For all first-time homebuyers in 2008. While it's a credit on your 2008 taxes you have to pay it back in equal installments over the next 10 years. 10% of home purchase price up to $75K.

[SpursFanFirst]

Thanks, AFB and CMG.
I hadn't heard about that credit before. I bought my place in 2006, so perhaps it was available after that time.

In any rate, I'm considering selling and buying this fall, so maybe that $15000 credit will be available to me.

Good luck, AFB!

[AFBlue]

Good luck, AFB!

I'm gonna need it! And I'm looking for any tips, see the Club thread.

[PuttPutt]

For all first-time homebuyers in 2008. While it's a credit on your 2008 taxes you have to pay it back in equal installments over the next 10 years. 10% of home purchase price up to $75K.

You pay it back till 2024 at $500 per year (if you qualify for the full $7500). If you sell the house before you pay back the money, you have to pay the remaining balance of the credit. I built my house this last year w/ a $0 down private money construction loan. Then, refinanced it to a FHA loan. I qualify for the $7500 & have finished my taxes. I'm just waiting to see what this $15,000 deal is all about before I file & to find out more on the $7500 first time buyer credit. I don't want to get screwed.

[Rogue]

I bet it won't cost the homebuyers that much if they build their houses by themselves with bricks and mud.