Washington Economic Stimulus Package Update
February 6, 2009
Good news you can share with your clients
Due to the efforts of the National Association of REALTORS® and specific members of Congress, we are making significant progress in regards to housing provisions in the National Economic Stimulus Bill.
Last week, the US House of Representatives passed the American Recovery and Reinvestment Act (H.R.1). This bill has some key provisions that will stimulate the housing market:
- It will restore FHA, Fannie Mae and Freddie Mac to 125 percent of median home prices – up to $729,750
- It would eliminate the repayment provision for the $7,500 first time home buyer tax credit
- It expands tax-exempt housing bonds
Two days ago, the Senate approved an amendment to their bill that offers up to a $15,000 tax credit to people that purchase a home in the next year. The credit would apply to anyone, not just first time homebuyers and you would not need to repay the credit. The credit is based on 10% of the purchase price of the home and the credit is spread over two years. So for example, if you buy a house with a purchase price of $300,000, you would qualify for the maximum credit of $15,000. The first year you claim the credit, you receive $7,500, and you would receive the remaining $7,500 the next year.
Senator Patty Murray Introduces Housing Amendment
In addition to supporting the $15,000 credit, Senator Patty Murray (D) Washington, has introduced her own amendment to the Senate Stimulus Bill relating to the FHA and conforming loan limits. Specifically, Murray’s amendment:
- Ensures that the 2008 FHA mortgage limits and conforming loan limits do not decline during calendar year 2009.
- Provides discretion to the Secretary of HUD and the Director of the Federal Housing Finance Agency (FHFA) to raise loan limits in sub-areas, up to the conforming ceiling for high cost areas.
- Temporarily increases FHA’s Home Equity Conversion Mortgage (HECM) limit to $625,500 for 2009.
“On behalf of all American families and over 20,000 Washington REALTORS® I’d like to thank Senator Patty Murray for introducing this amendment to the Senate Stimulus Bill to increase the loan limits” said Greg Wright, President of the Washington REALTORS®.
The Senate is considering its version of the bill. We anticipate much more debate and some changes in the days ahead, so please check Realtor.org often for updates.
Once the Senate passes a bill, we expect lawmakers to hold a conference to work out the differences, before sending it along to the President. The President wants a finished product by February 16, 2009.