Real Estate Stimulus

Hardly zero Dollars!!!  The House of Representatives today passed a $787 billion stimulus bill aimed at resuscitating the U.S. economy, approving it on a largely party-line vote of 246 to 183.  So much for bi-partisan cooperation. 176 Republicans voted against the bill, joined by 7 Democrats; no Republicans voted in favor of the package.

What does all this mean directly for real estate?  Here’s a summary of items in the new Stimulus package AND the Treasury’s package holistically as they directly impact real estate:

• Restores to $729,750 the upper loan limit in high-cost areas for Fannie Mae, Freddie Mac and FHA loan guarantee programs (Santa Clara County included).
• Tax credit for first-time homebuyers will be raised to $8,000; extends it’s sunset from July 1 to Dec. 1, 2009; and eliminates a requirement to repay the credit (unless a home is resold within three years).
• Over $50 billion in the stimulus for foreclosure mitigation.  Geitner’s Treasury plan also signals that the second half of TARP and TALF will be used to mitigate foreclosures through a government guarantee which should drive down interest rates by buying another $200-300 billion of mortgage paper from the GSES’s and freeing them up to do the same with new mortgages.
• Mortgage interest deductability remains unchanged
• Real estate property tax deductability has been preserved
• $250,000/$500,000 cap gains exclusion has been preserved (other than closing the loophole if you rent your home too)

tweet