Obama and the Federal Government Offers Financial Help to First Time Home Owners
Young families have found that purchasing a new home has become almost impossible during the last few years. Now, the federal government is offering help via a new stimulus package. By assisting families in making their first home purchase, the government is hoping to stop the decline in the US real estate market and help Americans again achieve their dream of homeownership. The First Time Home Buyers Stimulus Package is specifically directed to buyers who have not owned a home for the past three years. Both new homes and pre-owned home qualify for federal assistance. The government specifically hopes that new home purchases will assist job creation in the currently weak housing industry.
The program in hoping to stimulate the economy and encourage home purchases via tax credits, assistance with down payments, and lower mortgage rates.
The program began in 2008 but was initially only modestly successful. The economic was too weak at that point and most Americans were very reluctant to purchase a new home when house prices were still declining.
The current program permits a 10 percent tax credit for any home purchased between January 1, 2009 and December 31, 2009. The maximum allowed amount is ,000. Homeowners may claim the credit on their income tax either in the first year of purchase or the following year. For many this tax saving could be substantial and could permit additional savings in the family budget.
The program also facilitates a reduced down payment. As the housing sector of the economy worsened, many banks have tightened their loan requirements. In the case of home mortgages, a ten percent down payments and in some case twenty percent down payments is now common. This program will assist Americans to comply with the least down payment possible, and will produce lower loan origination fees.
The program income guidelines are clearly intended to assist middle class Americans. If you are unmarried, your annual income can not exceed ,000. The annual income limit for a couple is double that — at or below ,000.
The third portion of the program involves receiving a tax rebate. The actual dollar amount of the rebate will be determined by the interest rate of the home mortgage. Additionally, under this intend the first time homebuyer can actually qualify for both a tax credit and a tax rebate. This distinction is very important. Under this program, a tax discounted can be received for both owner-occupied homes as well as income property. One profited of being a landlord, not often understood by first time buyers, is that maintenance expenses on income property are legitimate tax deductions. This makes income property a very good investment.
The success of this government program will be a win for our country and a win for first time home buyers. It is well understood by everyone, that our economic recovery and future growth, are very dependent on a salubrious housing offer. Middle-class Americans would be wise to take advantage of this program to improve their personal lives and at the equivalent clocking help our countries return to a healthy housing economy.
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