The Housing Stimulus Bill: Good for the Housing Industry; May Leave Homeowners in the Cold
Last month, the US House of Representatives passed a Housing Stimulus Bill addressing the foreclosure crisis that is currently gripping the nation. While the bill includes several items aimed at helping the housing industry, some are quick to point out there is little direct help for families facing a foreclosure.The bill, which is awaiting Congressional approval, has three major provisions that could provide a significant boost to homebuilders and other businesses involved with the housing industry:
Tax Exempt Mortgage Revenue Bonds
The housing bill includes a $10 billion increase in state revenue bonds to help refinance existing mortgages and prevent foreclosures. The money will also be used to provide mortgages for first-time home buyers. The housing bill will further provide another $4 billion in grants to states and local governments in order to buy and renovate abandoned and foreclosed homes.
Net Operating Loss Carry Back Expansion
This provision allows any housing-related business that loses money in 2008 and 2009 to use those losses to offset the taxes they paid in the previous four years, as opposed to the two years currently allowed by law. By allowing operating losses to be claimed now, homebuilders and other businesses that are suffering will be given instant financial resources to help them get through the economic downturn.
Tax Credit for Purchase of Homes
To encourage the purchase of foreclosed or newly built homes, a tax credit of $7,000 would be available to new home buyers which could be claimed over two years.
While the powers-that-be debate the provisions of the housing bill and the extent to which it will actually help families facing foreclosure versus the housing industry itself, one thing is for certain: any intervention on the part of the government will bring some measure of welcomed relief to an ailing industry.
