With today’s passage of the historic stimulus bill by President Obama, the housing market is hopefully heading in a new direction to recovery. While the bill contained many programs to help stabilize the economy, the most important to home buyers were the provisions for purchasing a home.
A closer look at this bill shows that there are 4 areas that a home buyer will benefit. First is the loan limits will be raised to $727,000 for areas across the country that are classified as “high cost” housing markets. Second, the tax credit for buyers was raised from $7500 to $8000 with no payback on this credit. Third is a reduction in interest rates by 125 – 150 basis points. And last is the bill has over $50 Billion for foreclosure mitigation. This will help to mitigate foreclosures through a government guarantee.
While these may seem to be very small steps, they are important steps non the less. Every one of these measures will help to revive the housing market. First time home buyers stand to gain the most with this new bill. Lower interest rates, tax credit, cheaper housing and FHA financing will make buying a home in 2009 a wonderful opportunity. I only home that Home Buyers see the potential to buy with this new bill.