Obama plan for new homeowners

[maat55]

Create a Universal Mortgage Credit: Obama and Biden will create a 10 percent universal mortgage credit to provide homeowners who do not itemize tax relief. This credit will provide an average of $500 to 10 million homeowners, the majority of whom earn less than $50,000 per year.

This looks more like an across the board credit for those who do not itemize. It favors homeowners over renters, but it is obtainable to anyone who will buy or own a home, with the exception of those who itemize.

This is much better than rewarding only those who purchase in the next year, but is still cheating those who itemize.IMO.

[banditfist]

This is the government's attempt to pump the bubble back up on the housing market. Another stupid attempt.
Mean reversion is a pain. Nothing that the government can do to stop it. Forestall it yes, but you cannot avoid the unavoidable.
Will be interesting when the bond market tells the government 'no mas'. When that happens, the gig is up....immediately.

[gamecock43]

Jim, the plan is for first time homebuyers. you cannot have owned a house in at least 3 years...so this might be excluding the sub prime people and heloc foreclosures...given that they started in 07.

[ScrimpAndSave]

So does that mean...if I buy a house in December of this year...

I could put 10% down, have an 80% first mortgage and a 10% second mortgage...

...and then when I get the money with my tax return in 2010, I can put that full $20,000 on my 2nd mortgage to pay it off? That is what I would do if I could...

[gamecock43]

Not the most credible source...but I found this on a TN newspaper article: Chattanooga Times Free Press | Tennessee: Home builders push stimulus for housing

" Home builders are pushing Congress to approve a stimulus to jump-start the housing industry.

“We are calling on Congress to enact some bold measures to fix the housing crisis which is at root of the economic troubles,” said Phil Chamberlain, a member of the Home Builders Association of Tennessee and a home builder in Cordova, Tenn.

The association held a conference call Thursday to discuss a plan called Fix Housing First.

The builders’ effort is part of a national campaign to convince Congress to make changes to a tax credit of up to $7,500 for first-time home buyers, an incentive that Congress approved last year to stimulate the housing market.

Builders contend that program is ineffective because the tax credit must be repaid over 15 years, is provided during the buyer’s next tax return instead of at closing, and is available only to first-time buyers. The credit is available for homes purchased between April 9, 2008, to June 30, this year.

The housing stimulus money would go directly to buyers and sellers, not to builders or real estate agents, Mr. Chamberlain said.

The builders’ plan calls for eliminating the repayment of the current tax credit; providing a tax credit of up to 10 percent of a home’s purchase price, or up to $10,000 in the Chattanooga area; making the credit available at the time of closing; expanding the program to all buyers, not just first-time buyers; and setting a below-market, 30-year fixed-rate mortgage.

Fix Housing First also supports a proposal by Federal Deposit Insurance Corp. Chairwoman Sheila Bair to prevent foreclosures, said Bernie Markstein, a senior economist for the National Association of Home Builders.

Ms. Bair has called for modifying millions of delinquent mortgages to prevent foreclosure, using the Troubled Assets Relief Program, or TARP, which Congress approved for providing assistance to financial institutions."

So there is a discrepancy of up to $10,000 or $20,000...but if money is provided immediately- SWEET! for me! And even if this can apply to all homebuyers...subprime foreclosure people still cant get in on the action because of their credit- they wont get approved for a mortgage.

[maat55]

Jim, the plan is for first time homebuyers. you cannot have owned a house in at least 3 years...so this might be excluding the sub prime people and heloc foreclosures...given that they started in 07.

I'm not sure who's link is correct, but your link says nothing about Obama's plans. It is only one's proposed by private groups.

Scrimps link speaks of a possible proposal by Obama, and it says nothing about first time homebuyers, but all homeowners recieving the credit.

[ScrimpAndSave]

I wonder if the tax credit will still apply if you buy from a family member.

[gamecock43]

I know- it was my link that does not talk about obama at all. I'm trying to find the original article that my husbands father read that said Obama liked the homebuilders plan and was adopting it...and I found the TN article. Still have not found the Obama article.

[ScrimpAndSave]

Here is the original NAHB suggestion to Obama...

2.99% interest rate?! WOWZERS!



President-Elect Obama

[gamecock43]

Housing Stimulus Package to Help Economy | Home Buyer Tax Credit | Atlanta Real Estate Forum

" Take Action for Fix Housing First

The housing market is a key component in fixing the state of the economy. As long as the real estate industry is suffering, the economy in general will continue to suffer. It is for this reason that you must get on the phone to contact your local congressman in support of Fix Housing First. Fix Housing First is a plan to stimulate the housing industry and, by default, the economy. The proposed plan incorporates three different steps:

1. Enhance the initial Home Buyer Tax Credit:

* Eligible purchases: Primary residences between April 9, 2008, and December 31, 2009.
* Credit amount: 10% of home price capped at 3.5% of FHA loan limits (geographically dependent) — ranging between approximately $10,000 and $22,000.
* Eliminate the recapture — a true tax credit.
* Monetization: credit available at time of closing.
* Available to all home buyers and not just first-time home buyers.

2. Couple the enhanced tax credit with a below market 30-year fixed-rate mortgage for home purchases

* 2.99% rate available for contracts closed between now and June 30, 2009.
* 3.99% rate for contracts closed between June 30, 2009 and December 31, 2009.

3. Continue foreclosure prevention measures to keep people in their homes, help stabilize home prices and bolster the economy.

This proposed plan of action will encourage people to buy and boost the market. "

Same thing as S&S's post above but different format.

[ScrimpAndSave]

That is so awesome that you can get the credit at CLOSING! WOW!

[kork13]

[ScrimpAndSave]

I wonder when we will find out if this is going to be passed...wow. Do you think you will need 20% down to benefit from the 2.99% interest rate?


Hmmm....

[asmom]

Housing Stimulus Package to Help Economy | Home Buyer Tax Credit | Atlanta Real Estate Forum

" Take Action for Fix Housing First

The housing market is a key component in fixing the state of the economy. As long as the real estate industry is suffering, the economy in general will continue to suffer. It is for this reason that you must get on the phone to contact your local congressman in support of Fix Housing First. Fix Housing First is a plan to stimulate the housing industry and, by default, the economy. The proposed plan incorporates three different steps:

1. Enhance the initial Home Buyer Tax Credit:

* Eligible purchases: Primary residences between April 9, 2008, and December 31, 2009.
* Credit amount: 10% of home price capped at 3.5% of FHA loan limits (geographically dependent) — ranging between approximately $10,000 and $22,000.
* Eliminate the recapture — a true tax credit.
* Monetization: credit available at time of closing.
* Available to all home buyers and not just first-time home buyers.

2. Couple the enhanced tax credit with a below market 30-year fixed-rate mortgage for home purchases

* 2.99% rate available for contracts closed between now and June 30, 2009.
* 3.99% rate for contracts closed between June 30, 2009 and December 31, 2009.

3. Continue foreclosure prevention measures to keep people in their homes, help stabilize home prices and bolster the economy.

This proposed plan of action will encourage people to buy and boost the market. "

Same thing as S&S's post above but different format.

That's not Obama's plan either. That is a plan put forth by a coalition called "Fix Housing First" which includes -you guessed it- homebuilders and manufacturers.

[ScrimpAndSave]

A Plan to Fix the Housing Market | Fix Housing First