Article Advise

submitted: Sep 4th 2008 | by: PrestonJohn | Total views: 1 | Word Count: 582 | |

We've all heard the housing stimulus package being discussed, argued and lobbied...it was in the air for months. But on July 31, 2008 the discussions took on a different perspective because the bill was signed and the package was in effect. It's becoming known as one of the most important federal housing policies with a very wide reach including: LIHTC regulations, bonding capacity, national housing trust fund, foreclosure and credit crisis, GSE reforms and more.

The housing stimulus awards first time home buyers with a tax credit in the amount of $7,500 as a result of buying a new home. New home purchases made between April 9, 2008 and July 1, 2009. For the purposes of the tax credit a new home buyer is someone who has not owned a home in the previous 3 years. While the tax credit is not the only item included in the stimulus package now in effect, it is a very central item that has been given a lot of emphasis. Housing industry experts in particular note that the tax credit specifically could be just what is needed to initiate the flurry of home purchases that is needed to stimulate the market.

Opponents of the bill note that the national debt is being elevated to aid Fannie Mae and Freddie Mac, two private companies (and mortgage giants) with publicly traded stock. The package has been criticized due to the stated guarantee that monetary help will come from the government. They claim this arrangement offers the opportunity for private profits dependent upon risk and loss resting on society as a whole. The elevation of the national debt by the estimated $25 billion to be spread out in the next two years of the federal budget is also another popular negative among bill opponents.

Prominent supporters of the bill include the NAHB (National Association of Home Builders). The National Assoc. of Home Builders fully supported the package and sees it as the stimulus the housing industry needs to pick itself up after the recent explosion resulting in the current recovery period. They see it as the perfect confidence builder that will give home buyers the push they need to purchase now.

Considering the astronomical numbers of foreclosures currently on the market, the bill seems to be the most appropriate reaction. For instance, as of March 2008, there were over 210,000 residential properties in foreclosure in California alone. The recent bill will leave California the recipient of $365MM in direct funding and leverage over $780MM in additional grants. One of the results of the monetary benefits will be the generation of over 6,500 new jobs and the return of nearly $10 billion in property taxes.

Amongst new home builders, support is nearly unanimous. Owner of Montalbano Homes, Anthony Montalbano, claims, "This stimulus package is just what the economy needs. It will alleviate the obvious issues in the housing industry and that will begin the ripple effect that is needed to aid the economy as a whole. We needed to do something to alleviate the problems that came with the housing explosion that occurred in the last several years."

Regardless of the opponents and the supporters and those that are riding the fence on this one...buyers have a unique opportunity to take advantage of the tax credit through June 2009. The opportunity is simple, easy, and for a limited time only so savvy home buyers are now in the know when it comes to pin pointing the "right time to buy.

About the Author

Preston R. John is the C.E.O. of Larry John Wright Builder Advertising (LJWBA) and Associate Broker of Larry John Wright Real Estate, Inc. To get further info visit Montalbano Homes. Or contact Montalbano Homes for up to date information on new build, residential opportunities.

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