American Recovery and Reinvestment Act of 2009

The new $787 billion American Recovery and Reinvestment Act of 2009 will help home buyers, as well as homeowners. It includes the following:

• Home Buyer Tax Credit - Under the bill, first-time home buyers can receive a tax credit for 10 percent of the value of a home, up to $8,000. The tax credit applies to first-time buyers who purchase a home from Jan. 1, 2009 to Dec. 1, 2009. Buyers don't need to repay the tax credit unless they sell their home within three years.
• FHA, Fannie Mae, and Freddie Mac Loan Limits - The bill reinstates higher loan limits for FHA, Fannie Mae, and Freddie Mac that were first introduced in 2008, making loans more affordable for consumers no matter where they live.
• Neighborhood Stabilization - An additional $2 billion in funding for the Neighborhood Stabilization Program will enable local governments to purchase, manage, and repair foreclosed and abandoned properties and sell them to home buyers at affordable prices.
• Low-Income Housing Grants - The bill allows states to trade in a portion of their 2009 low-income housing tax credits for Treasury grants to finance the construction or acquisition and rehabilitation of low-income housing.
• Tax-Exempt Housing Bonds - Tax-exempt interest earned on specified state and local housing bonds issued during 2009 and 2010 will not be subject to the Alternative Minimum Tax.
• Energy-Efficient Housing - Through 2010, homeowners will be able to claim a 30 percent tax credit (up from 10 percent) for purchases of new furnaces, windows and insulation.