First Time Homebuyers and the Government Stimulus Plan

by

Bryan Hendersen

It’s been long believed that home ownership is an integral key to national and personal prosperity. This line of belief has, unfortunately, been instrumental in the recent instability and uncertainty for our economy. Many people who may have been ready to buy their first home are finding such a purchase now appears impossible given the state of the housing market. However, home ownership in itself is not a bad thing and is still one of the keys to economic recovery, which is why the Federal Government is offering various programs to aid those still wanting to buy their first home. This program also includes former owners who have gone three or more years since purchasing a residence. The First Time Home Buyer Stimulus Package is just such a program and worth the time it takes to learn all the details.

Existing and brand new homes both qualify for the program. New home builders have been especially hard hit by the drop in home sales and housing starts, as their business has a “ripple effect”, laying off construction crews and contractor. The program provides the following benefits to home buyers:1. Credits on tax returns. Credits are a powerful tax incentive as they directly reduce the bottom line amount of taxes you may owe, regardless of your tax bracket.2. Down payment help. Gathering the required down payment is one of the biggest hurdles homebuyers face and often stops them from purchasing a home.3. Lower interest rates. A low rate can make the world of difference when it comes to affording your new home, ensuring payments that you can manage.Although the government created these types of stimulus packages back in 2008 at the peak of the recession, the results were not particularly encouraging. Buyers still weren’t buying, whether due to the lack of a financial incentive or the ongoing atmosphere of fear and uncertainty. This sent the designers back to the drawing board, as it were, to come up more effective and attractive programs.Currently, homes bought between January 1, 2009 and December 31, 2009 may be eligible for up to 10 percent tax credit, a significant savings. The ceiling for the credit is $8,000 and is based on the gross price of the home purchase. Buyers have the option of applying for the tax credit the year they bought the home or choosing to file for it up to two years from purchase date. The reasoning for this type of credit, which directly reduces tax payments, was the thought that buyers may then put the savings away for future use.Down payment assistance is another big incentive for many buyers. Typically at least 10 percent of the purchase price, a down payment can be a difficult sum to accumulate and often delays home buying. Government plans offer down payment assistance by reducing the percentage required, even if you have the down payment saved. If so, that money then can be invested or applied towards future home improvements and projects for your new home. A reduction in interest points is another part of the government assistance program. Points paid in a mortgage loan affect the overall interest rate and can make or break a home purchase. Income limits apply for buyers to qualify. Single purchasers must make no more than $75,000 annually. Partners who are buying a home in joint ownership have a limit of their combined income at $150,000 annually or less.Tax rebates, which are different that tax credits, are also included in some of the Federal Stimulus programs. Based on the assessment price of the loan, tax rebates are a type of deduction on income taxes and can also be beneficial for landlords who purchase properties for the purpose of being rented and producing income. An equivalent is the tax deduction for property maintenance on a rental. Persons who qualify as first time buyers may be able to use both the tax credit and tax rebate program. Growth and recovery in the housing market is well known as a major key in the recovery of this country’s financial stability. These government stimulus programs are aimed directly at the real estate market to benefit the country and individuals. The First Time Home Buyer stimulus package is tailored for just that.

For tips and facts about how you can benefit from

Obama’s Home Stimulus Plan

– or to find out if you qualify, visit our no nonsense home stimulus guide:

ObamasStimulusPackage.net

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First Time Homebuyers and the Government Stimulus Plan}