Stimulus Plan In Simple Terms: "American Recovery and Reinvestment Act of 2009"

A lot of folks are overwhelmed with all the press-saturation of coverage, but limited explanation, of what the 'stimulus package" can mean to you. I hope this will provide you the kind of straight-talk explanation that you need in order to decide if or how you can benefit by this in your real estate decisions. I often get calls and emails on my efforts to clarify complex real estate issues, but I would especially appreciate hearing from you on this issue. Let me know what questions you still have after reviewing this effort below, to clarify the real estate aspects of the stimulus package.

Roughly 35% of the $780 billion American Recovery and Reinvestment Act of 2009 is devoted to tax cuts concentrated in 2009, and the remainder for spending intended for 2009-2010. The bill includes the following ten provisions:

1. Homebuyer Tax Credit


2. FHA, Fannie Mae and Freddie Mac Loan Limits


3. Neighborhood Stabilization


4. Commercial Real Estate


5. Rural Housing Service


6. Low Income-Housing Grants


7. Tax Exempt Housing Bonds


8. Energy Efficient Housing Tax Credits & Grants


9. Transportation


10. Broadband Deployment.

Section 1, The Homebuyer Tax Credit, provides for a $8,000 tax credit that would be available to first-time home buyers for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009. The credit does not require repayment. Most of the mechanics of the credit will be the same as under the 2008 rules: the credit will be claimed on a tax return to reduce the purchaser's income tax liability. If any credit amount remains unused, then the unused amount will be refunded as a check to the purchaser.

Here are answers to many of the frequently asked questions about the Homebuyer Tax Credit. Here is the official IRS Form 5405 to claim your tax credit.

If you want clarification on any of these real estate related provisions please give me a call and we can discuss it.