Making sense of the New Economic Recovery Act of 2008 for Western New Yorkers

What does this program mean for you?  

We are hearing all the pros with the Housing & Economic Recovery Act of 2008, but like all laws there are things that get buried in with the good.   The Housing and Economic Recovery Act of 2008 does not tell us how they are going to pay for this “tax credit” for first time home buyers or how the FHA is going to “save” delinquent homeowners.

Read Also:  More about the seller-funded downpayment assistance provision
Tips to finding downpayment assistance programs 
More about the CDBG funding provision
FHA Foreclosure Rescue Chart
FHA Reform Chart

The Tax Credit is really a loan.   A loan that is no interest and must be paid off over 15 years.   This is an interest free loan and first time homebuyers who purchased between April 9, 2008 and July 1, 2009 will be eligible for this “tax credit”.  This credit is limited to 10% of the purchase price to a maximum of $7,500.

I read ”With The New Housing Law, The $250,000/$500,000 Capital Gains Exclusion Is Gone“ by Dan Green and it immediately caught my attention.     On page 690 there is is a change to the Capital Gains Exclusion rule that will affect many investors.  Under the new Capital Gains Exclusion rule changes from 2 of the previous 5 years to a ratio of time the residence was primary to time owned.   The effective date of the new Capital Gains Exclusion rule is January 1, 2009, so we can expect to see much activity leading up to the New Year.  

Read Also:  As Housing Act Passes Congress, Questions Emerge

If you have been dealing with the Capital Gains, it is time to call your Accountant or Financial Advisor to see what the ramifications could mean to you.   Right now you have time to act, wait and it could cost you.

Call me if you are ready to buy or sell a home in Western New York at (716) 743-5297.