New Bill Seeks to Extend, and Expand, the $8000 Tax Credit for Oregon Home Buyers
Janet Guilbault posted an interesting, and somewhat expected, post today. There is a new bill before Congress (Home Ownership Moves the Economy Act of 2009 HR 2801) that is set to extend the $8000 Tax Credit and to expand it to more home buyers. This is good news for Oregon Home Buyers!
While I have mixed feelings about more Govt. spending, I do agree that we are still not out of this economic mess. I have also seen first hand how the first time home buyer market in Oregon has increase property values due in large part to the $8000 tax credit.
We have also seen Builders adapt to the Oregon First Time Home Buyer market. The majority of homes being built now are aimed at this segment. This has helped stimulate our local economy in Newberg to a small degree. Combined with low rates and the USDA Guaranteed Rural Home Loan, there has been continued building in some of our areas.
What we need, is help for the "Move-Up" market. The $250,000 to $400,000 market in our area. These are the homes that are going into foreclosure the most. Many homeowners are sitting on the fence afaid to buy a new home. They have lost a lot of equity in their current home and are unsure about the future.
With a resurgence in the First Time Home Buyer market here in Oregon, many of these sellers could sell with a reasonable profit. With the addition of a Tax Credit, they just might get off the fence and take advantage of many wonderful opportunities for nice homes in the $250,000 to $400,000 range.
It will be interesting to see what Congress does, and to what degree it will stimulate the economy.
We are having a First Time Home Buyer Seminar in September. Click HERE for information
Here is Janet's post
Okay, the name for this new bill may not be as catchy as "Cash for Clunkers" but you gotta love it:
Home Ownership Moves the Economy(HOME) Act of 2009. HR 2801 was introduced by Howard Coble (R-NC).
It would continue the current tax credit for first time homebuyers set to expire on December 1, 2009, with a couple of notable changes:
- Income restrictions would be removed
- Buyers do not need to be first time buyers
Okay, everybody, all together now "SHHHHHHHHHHHHHHHHHH". For those of us who decided not to take a vacation in October and November to handle the "rush" of people trying to beat the deadline, this will squash that idea.
Who will rush to buy if they are going to extend the credit anyway?
People like my kid.
She is a potential first time buyer who makes way too much money to qualify and gets KILLED each year paying income tax. She may be jumping off the fence when she reads this.
And people like her are much more likely to help the economy (they have more disposable income).
Wait a second, didn't I suggest this very same idea in this post?
Also written today: How 15 Year Mortgages Could Save the Economy
Written by Janet Guilbault, Mortgage Banker/Broker based out of the San Francisco Bay Area
Larry Morris is a Certified Mortgage Planning Specialist in Portland, Oregon. He specializes in USDA Guaranteed Rural Home Loans, FHA Purchase and Refinance, FHA 203k Rehab loans, FannieMae HomePath loans, Oregon VA Loans and conforming purchase and refinances in the states of Oregon, Washington and Idaho.
He can be reached at 503-421-0096.
There is a $9 trillion dollar deficit anticipated over the next 10 years and the bill will be funded how? By adding to the deficit. Although some would benefit from immediate gratification, I think it's unfair to pass this debt on to the next generation.
GREAT INFORMATION
I don't think the program is helping much at all. What they should do instead of giving our money away is make mortgage rates available to everyone at 3% or 4%. Let everyone refinance and keep their homes, that would keep the inventory down and help everyone.
Vickie - I agree that this isn't a perfect solution. But I do know that there have been several builders who have adapted to this market who have kept their employees and subcontractors working when they otherwise would have been laid off. These employees pay taxes and their mortgages in part due to the $8000 Tax Credit. We have seen the inventory for starter homes reduced and the prices increase as a result of low rates and the $8000 Tax Credit. Rather then a "gift", it would be nice to see it be a Credit that is repaid when they sell the home. The govt could easily place an $8000 no interest lien against the property.
Richard - In our market, the first time home buyer market is about the only thing moving. SO for us it is working. If everyone refinanced at 3-4% with no real underwriting we would see an initial resurgence of business, but who would subsidize the 3-4%? Would the secondary market get excited about a 30 year loan with those kinds of returns?