After months of discussion, argument and lobbying for and against the housing stimulus package-it was signed into law on July 31, 2008. The stimulus package has been called one of the most important federal housing policies in a generation addressing: the foreclosure and credit crisis, providing new oversight as well as structural reforms for the GSEs, improving LIHTC regulations through careful revisions, increasing bonding capacity, and creating a national housing trust fund.



For first time home buyers, the enactment of this particular piece of legislation means a tax credit in the amount of $7,500 as a direct result of the purchase of a home. Eligible home purchases must be made between April 9, 2008 and July 1, 2009. A first time home buyer is defined (for the purposes of this tax credit) as being anyone who has not owned a home in the past 3 years. The tax credit is central to the package and has been receiving a lot of attention from industry experts as well as buyers themselves; many of which see the tax credit as the bonus that tips the scales towards buying a home now.

Opponents of the bill note that the national debt is being elevated to aid Fannie Mae and Freddie Mac, two private companies (and mortgage giants) with publicly traded stock. The package has been criticized due to the stated guarantee that monetary help will come from the government. They claim this arrangement offers the opportunity for private profits dependent upon risk and loss resting on society as a whole. The elevation of the national debt by the estimated $25 billion to be spread out in the next two years of the federal budget is also another popular negative among bill opponents.

The National Association of Home Builders was one of the main supporters of the stimulus package believing that it is exactly what the industry needs to restore buying confidence and stimulate the market by giving new home buyers a reason to buy now.

When the current state of the market is considered (astronomically high numbers of foreclosures) the stimulus package becomes even more obviously appropriate. For example, at the end of March 2008 there were in excess of 210,000 residential properties listed as foreclosures in California. As a result of the stimulus package, California will receive $365MM direct funding as well as leverage over $780MM through additional grants. This will lead to an additional 6,500 new jobs and $10 billion in property taxes returned.

Owner of Montalbano Homes, Anthony Montalbano, believes that "the stimulus package will provide the housing industry with the chance to get back on solid footing after the explosion that occurred in recent years. The importance of the housing industry to the economy as a whole will be apparent as the boosted buyer confidence trickles through the system and aids the general economy."

Experts, industry leaders, politicians...everyone has their own view of the stimulus package, but one thing can't be argued. That one item that is indisputable is that fact that home buyers have a unique opportunity through June of 2009 to take advantage of the offered tax credit. It's not difficult, it's not out of reach and while it's for a limited time, it isn't an obscenely short period of time. Buyers in the know will recognize the opportunity and take advantage of it before it's too late.