Huge mistake in the stimulus bill.

[Tennessee Gal]

The $15,000 tax credit for home buyers has now been reduced to $8,000, which is fine. But it was originally for anyone buying a home in the next twelve months. Now it is only for first time home buyers who actually owe $8,000 in taxes.

#1 First time home buyers are few and far between because of the economy.

#2 First time home buyers who qualify for a mortgage rarely owe $8,000 in income taxes.

#3 Had the tax credit been left to anyone buying a home, it would have created a domino effect boosting the real estate market, benefitting both a buyer and a seller.

[liberal N proud]

1. Let me get this straight...

If I have never owned a home and I owe $8,000 in taxes, they will give me $8,000 tax credit IF I purchase a home?

Does that mean I traded $8,000 tax debt for a mortgage? And will that not burden me with more debt than the $8,000 in taxes I owe?

Sounds like that is what you are concluding from the plan.


FUCKED UP!

[Tennessee Gal]

3. Here is the explanation.

Yes, it will burden you with more debt.

However, if you are currently a renter, you are paying rent benefitting the owner of the property who is accumulating equity and increasing his/her net worth. You are gaining nothing.

By purchasing a property and paying the mortgage payment in a timely fashion, YOU ARE THE ONE GAINING EQUITY!

Plus, depending upon your tax status, you have the opportunity to take a tax deduction for the interest paid on the mortgage.

Financially, you are much better off by buying a home.

[we can do it]

16. Good Info -I know Its Cheaper To Own Than Rent In Ohio

There are a few other states that this is true as well.

[taught_me_patience]

35. Are you a realtor or mortgage broker? n/t

[karynnj]

29. You have to look at the whole picture

Assuming that this passed and was affective later in 2009, when you bought the house in 2009 - it would give you a tax credit on your 2009 taxes - that you pay by April 2010. You could get the benefit gradually starting as soon as the purchase was made by adjusting your withholding to reflect the credit you would be getting.

This actually would be a generous gift - worth $8000 to you by April 15, 2010. Obviously you shouldn't buy the house unless you can pay the mortgage on an ongoing basis. Your debt will be higher after you buy the house, but your assets (including the house) are higher too. For those who already intended to buy a house, this credit will add $8000 to their assets, without changing the debt. There may be some people with secure jobs into the future but little savings for whom this could make a difference if the banks were to approve them where they otherwise wouldn't because of the higher take home in the first year because they could change the tax withholding. This does seem unlikely in today's market - where better credit is needed.

So, who would likely benefit?

People already intending to buy homes who qualify. Will this cause some purchases that wouldn't otherwise happen? Maybe, if someone wanted a house, could afford it, but were hesitating because of concern over the future - this could be an offer too good to refuse.

[proud2BlibKansan]

2. Well, IIRC, the reupkelicans insisted on this portion of the bill

[KharmaTrain]

4. Bassackwards On How To Deal With The Mortgage Mess...

Giving money to people to buy these landmines is just asking for abuses...and not from those trying to buy but those selling and lending. This takes the onus off the real culprits of this mess, the mortagage lenders and other predators that see this money as a change to charge a ton of fees and interest rate...in the end using this program to try to cover their sorry asses by suckering in both government money and putting it on the homeowner to fend for themselves here.

The one thing I've been waiting to hear...and still haven't, is either a move to repeal that repressive bankruptcy bill and put caps on interest rates as well as demanding that banks renegotiate not just home mortgages but personal debt as well as a jobs program that ensures that not only can people afford those homes, but to prevent future speculating and preying off the poorest and most vulnerable in society.

[mmonk]

5. Yep. We need housing to improve or any recovery is going to go slower.

They should have adopted the National Association of Realtors approach of everyone being eligible for the tax credit. The following we were able to impact:

Foreclosure Mitigation & Neighborhood Stabilization – Funding for states and local communities to be used for neighborhood stabilization activities for the redevelopment of abandoned and foreclosed homes are authorized.
These elements of the American Recovery and Reinvestment Act of 2009 are the pillars of the NAR Housing Stimulus Plan presented to the 111th Congress. Additionally we continue to work closely with the Department of Treasury and Secretary Timothy Geithner to implement a mortgage buy-down program. NAR also recommended that the Treasury Department expand the Term Asset-Backed Loan Facility (TALF) to include commercial mortgage-backed securities as eligible collateral. The Treasury has approved this recommendation and this will encourage investment in the commercial real estate market.
Additional Housing and Other Provisions of Interest to NAR:
Rural Housing Service - Increased funding for the Rural Housing Service direct and guaranteed loan programs.
Low Income Housing Grants - Allow states to trade in a portion of their 2009 low-income housing tax credits for Treasury grants to finance the construction or acquisition and rehabilitation of low-income housing, including those with or without tax credit allocations.
Tax Exempt Housing Bonds - Tax-exempt interest earned on specified state and local bonds issued during 2009 and 2010 will not be subject to the Alternative Minimum Tax (AMT). In addition, financial institutions will have greater capacity to purchase tax-exempt state and local bonds.
Energy Efficient Housing - Grants for energy retrofits for federally assisted housing (section 8), funding for Energy Efficiency & Conservation Block Grants to states, and Increases in the residential tax credit through 2010 for certain energy efficient upgrades.
Transportation - Spending for upgrades and repairs of road, bridges and transit facilities.
Broadband Deployment – Grants to make broadband available in unserved communities

[we can do it]

6. Stop Spreading False Info Please- tax credit is refundable

from the federal housing tax credit site....

I heard that the tax credit is refundable. What does that mean?

The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit.

http://www.federalhousingtaxcredit.com/faq.php#11

[Tennessee Gal]

7. You are talking about the one in 2008.

Not the one in the new stimulus bill.

I am not spreading false information.

[we can do it]

8. Yes Dear You Are It Is Refundable and It Doesn't Help Anyone To Do So

Congress and the White House have reached agreement on a $789.5 billion economic-recovery package, clearing the way for final votes late this week on Capitol Hill. Unfortunately certain tax breaks, including the homer buyer tax credit, were scaled back to $8,000 (from the proposed $15,000) to get sufficient support for the stimulus bill's approval. This is $500 more than the current home buyer tax credit (outlined below), but will only be available for qualifying home purchases this year between January 1, 2009 and September 1, 2009. (dates still to be finalized).

However, the final stimulus plan did leave in the $3 billion provision that would eliminate the repayment requirement for the tax credit for first-time home buyers (this may also be available to those using or have used the current home buyer tax credit). This means that the home buyer tax break is a true tax credit and not a deduction, so will be an actual $8000 reduction on your next tax bill. If you don't owe that much and purchased a house in the qualifying period, you get a check back from the IRS.
http://www.savingtoinvest.com/2009/02/15000-first-home-buyer-tax-credit-in.html

[Tennessee Gal]

10. I hope you are right, but that is not what I read.

[peace13]

13. You agree with what the bank told me yesterday!

Current plan gives $7500 to new home buyers and is repaid to the government at $500 a year over 15 years at zero interest ( which is about what the banks are paying now!)

[Tennessee Gal]

19. Current plan is not what is in the stimulus that is yet to be made law.

[we can do it]

34. (I Think We Should Wait To See What Ends Up In Blck and White)

[mmonk]

11. Simply put, its a tax credit that doesn't have to be repaid.

Homebuyer Tax Credit – a $7500 tax credit that will be available for qualified purchase of a principal residence by a first time homebuyer between January 1, 2009 and September 1, 2009. The credit does not require repayment. Individuals who purchase in 2009 using financing assistance from state and local mortgage bonds will be permitted to use the credit, as well.

[peace13]

14. You might want to double check that! n/t

[mmonk]

17. Link?

[peace13]

23. Sorry, I don't have a scanner.

My info comes from a brochure that I picked up from the bank yesterday. I will search for something online. It is dealing with the current program.

[mmonk]

25. No problem. If you do come by it somewhere, send it to me or post.

[peace13]

26. This is the same answer I got yesterday about the current program.

http://answers.yahoo.com/question/index?qid=20080905223026AAyAeNZ


We can only hope that the new program is not a loan.

[mmonk]

30. I hope not. It was bad enough they cut the amount in half

and only applied it to first time home buyers. It kind of defeats the idea of stimulus. This is the first time I've seen anything that indicates it has to be paid back.

[mmonk]

22. Unless my information is dated the following is what we advocated for

and what we've ended up with so far. Please feel free to correct anything you see that is incorrect.

Advocated for: http://takeaction.realtoractioncenter.com/campaign/2009stimulus?qp_source=dotorg&LID=RONav0019

Ended up with so far:http://www.realtor.org/government_affairs/gapublic/credit_crisis_hr1_reconciled

[peace13]

31. Good news, according to this the new bill does not require repayment.

Looks like it is for first time home buyers. This could help with so many houses on the market.
- Revises the $7,500 tax credit for first-time home buyers by removing the repayment requirement.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x5045606

[Tennessee Gal]

9. $15,000 Home Buyer Credit Scrapped from Stimulus

One of the most prominent casualties of the stimulus compromise deal reached on Wednesday is the $15,000 tax home credit for homebuyers that had been included in the Senate's original plan.

Potential home buyers, sellers, and the housing industry as a whole had been looking at the credit as a substantial boost towards jump-starting home sales across the country. For now, they'll all have to settle for a much more scaled-back provision: a more modest $8,000 tax-credit for first-time home buyers, a $500 increase over a similar credit introduced last year.

~snip~

The Congressional Budget office had priced the cost of the $15k tax credit at $35.5 billion. The estimate of the revised credit is closer to $3.7 billion, a substantial reduction.

http://www.thestreet.com/story/10463698/1/15000-home-buyer-credit-scrapped-from-stimulus.html?cm_ven=GOOGLEN

[peace13]

12. 'a $500 increase over a similar credit introduced last year'

I was in the bank yesterday and picked up a brochure on the 2008 plan. First time home buyer gets $7,500. Which is paid back to the government over a period of 15 years at $500 a crack. I asked the bank manager and she clarified this for me. My guess is you now get 16 years to pay it back! Plus your mortgage and all of the fixin's. I don't understand why our politician's think that this is any help at all.

[Tennessee Gal]

20. You are talking about the one in 2008.

Research the one about to be included in the 2009 stimulus bill.

[BlooInBloo]

15. Doesn't matter - it's a crappy provision *anyway*. We need *lower* housing prices. Duh.

EDIT: Remember that, like, housing BUBBLE thing that got us into this mess?

[mmonk]

18. Uh, we got that. How do you think people were ending up

owing more than their home was worth? Foreclosures are way up causing rapid decline in pricing forcing losses in existing construction.

[we can do it]

32. Some People Haven't Noticed-If They Aren't Shopping or Selling for Example

[Tennessee Gal]

21. Housing prices have gone down throughout the country.

[Dawgs]

28. Delete. Wrong place.

[MarjorieG]

24. Criticism was open for abuse/waste, relatives swapping, etc

[mmonk]

27. We get to swap relatives? Cool.

[MarjorieG]

36. Great pick-up-and idea; unintended consequence of short subject tag

[jpak]

33. Republic meddling - never ever ever pal around with these assholes

they made a good deal bad.