4 Ways the Stimulus Package Helps Homebuyers and Sellers

So you've heard about the stimulus package, but what's in it for you? Well, there are four important ways that the stimulus package helps homebuyers and sellers.

1. You're probably familiar with the refundable first-time homebuyer tax credit of up to $8,000. It is the centerpiece of four housing incentives found in the 2009 American Recovery and Reinvestment Act.

2. Expansion of the home improvement tax credit. The tax credit for making energy-efficient home improvements has been raised to 30 percent of the cost of the improvements, up to a maximum of $1,500. Eligible improvements -- which must meet the standards established by the federal government -- include replacing doors and windows, adding insulation, and installing new heating and air conditioning systems and water heaters.


3. Higher FHA reverse mortgage loan limits. Loan limits for reverse mortgages insured by the Federal Housing Administration have been increased to $625,500 across the country.
The previous limit was $417,000 across the country, which meant that in markets where homes are more costly --such as the San Francisco area, New York City and its suburbs, and Washington, D.C. -- FHA-insured reverse mortgages were not available for many homes.


4. Higher FHA and conforming loan limits. The maximum FHA loan limit for high-cost areas has been restored to the 2008 level of $729,750. Stimulus legislation passed by Congress in the first half of 2008 temporarily raised the FHA loan cap from $362,790 to $729,750 in cities where housing is particularly expensive. However, the higher loan limit expired in January and was replaced by a lower loan limit of $625,000.

Click here for more details. Source: Bankrate.com