The Washington Post reported yesterday that the House has added a provision to the new economic stimulus package that could greatly assist many first-time homebuyers. The initial provision to the program offered a $7,500 tax credit to qualified first-time homebuyers or any other buyer that hasn’t owned a home in the last three years. Naturally buyers need to meet income criteria in order to qualify and the funds are actually dispersed in the form of an interest-free 15-year loan. The real news here is that Congress is looking to eliminate the re-payment requirement.
Yee Haw-- FREE money from Uncle Sam!!!
There are some strings attached. First of all, you can’t earn more than $95,000 as a single, or $150,000 as a couple. But the truly frustrating part of this program is that the money comes to the buyer after their closing when they file their income tax return. That means if you closed on your house today, you won’t get your $7,500 ‘til next April 15 or so. If you don’t have friends (good friends) or family that can help you with “gift money” (whatever you do, don’t let the mortgage people hear you call it a loan) then this credit doesn’t do you a bit of good.
What were they thinking?! First-time homebuyers need the money before closing. Who wrote this legislation, Homer Simpson?!
Either way, a savvy Realtor, a willing seller, and a buyer with a generous granny can normally join forces to help make the transaction happen. It’s just a shame that our legislators are so detached from regular people that they can’t see the merits of making this legislation a little more user friendly.
Ultimately, Congress got it right. If you want to stimulate the economy, you start with the real estate market. And if you want to stimulate the real estate market, you get money in the hands of first time homebuyers.