Everyone thought that the passing of the Housing and Economic Recovery Act of 2008 would stimulate the housing market. The $7,500 tax credit for first-time homebuyers was at the core of this economic stimulus package. Unfortunately, there were so many regulations and stipulations in the fine print of the tax credit that it really has had no effect on the housing market and none on the economy in general. Well, some Congressmen have realized the problems with the original tax credit and have proposed legislation to amend it. More specifically, Georgia Senator Johnny Isakson has introduced legislation into the Senate that enhances the tax credit and makes it more appealing to buyers. The proposed legislation would:
- Make the tax credit available for everyone, not just first-time home buyers
- Eliminate the repayment requirement unless the house is sold within three years
- Extend eligibility to December 31, 2009
- Increase the monetary amount of the credit to be 10% of the home price capped at 3.5% of FHA loan limits – so ranging from $10,000 to $22,000
- Monetize the credit so it is available at the time of closing
- Allow the credit to be used in conjunction with mortgages financed by state or local bonds
What is your opinion? Do you think amending the homebuyer tax credit to these regulations would encourage more buyers in the market? Would it have enough of an impact on the housing market to see a turnaround in the economy as a whole? If you are behind this proposed legislation, then take action and show your support for the bill. Read more information about the bill here.