How will the Stimulus Package Affect Homeowners?

The big news last week was the signing of the $789 Economic Stimulus Package. The original $15,000 credit has been scaled back to $8,000, but drops the repayment feature for buyers who hold on to their property for at least three years. Here are some of the other highlights in the bill that pertain to housing: FHA and conforming loan limits: The 2008 limits have been reinstated for 2009 except in those communities where the 2009 limits are higher. Additional increases in individual communities may also be available at the discretion of the secretary of the U.S. Department of Housing and Urban Development. Foreclosure mitigation and neighborhood stabilization: Funding for states and localities to be used for neighborhood stabilization activities for the redevelopment of abandoned and foreclosed homes are authorized. Some news reports put the funding level at $2 billion. Rental assistance: Up to $1.5 billion for short-term rental assistance and other aid for families during the economic crisis. Transportation infrastructure: Up to $29 billion for highway construction projects, $8 billion for rail projects, and $5 billion to weatherize low-income homes. Rural housing development: Increased funding for the Rural Housing Service direct and guaranteed loan programs. Energy efficient housing: Grants for energy retrofits for federally assisted housing (Section 8), funding for energy efficiency and conservation block grants to states, and Increases in the residential tax credit through 2010 for certain energy efficient upgrades. According to The National Association of Realtors, eliminating the repayment provision on the first-time homebuyer tax credit could drive more than 200,000 additional home sales, which will help stabilize home values. The National Association of Home Builders had estimated a $15,000 tax break for all homebuyers would have generated nearly 500,000 home sales. Listen to the entire show featuring the Stimulus Package commercial-free: