Some good news for the future of the Loudoun County real estate market came along with the passage of President Barack Obama's $787 billion stimulus bill titled the American Recovery and Reinvestment Act of 2009.
Although the package will not be the last of the fiscal bills to address the real estate market, there are several programs designed to provide short-term incentives to home buyers as well as infrastructure and housing-program funding to help with a much-needed boost to the local economy.
They are as follows:
1. Home-buyer tax credit. The bill provides an $8,000 tax credit that will be available to first-time home buyers for the purchase of a principal residence on or after Jan. 1, 2009 and before Dec. 1, 2009. A person is considered a first-time buyer if he or she has not had any ownership interest in a home in the three years previous to the day of the 2009 purchase. The credit does not require repayment.
2. FHA, Fannie Mae and Freddie Mac loan limits. The bill reinstates last year's loan limits for FHA, Freddie Mac and Fannie Mae loans. These limits were equal to the greater of 125 percent of the 2008 local median home price, or $271,050 for FHA and $417,000 for Fannie and Freddie, with an overall maximum cap of $729,750 that applies to Loudoun County. These 2009 limits will expire Dec. 31, 2009.
3. Neighborhood stabilization. The bill provides $2 billion in additional funding for the Neighborhood Stabilization Program, which provides grants through the Community Development Block Grant program to states and localities to address problems created when whole neighborhoods are decimated by foreclosures. The funds can be used to purchase, manage, repair and resell foreclosed and abandoned properties.
4. Commercial real estate. The new law also provides significant funds for state energy programs, which could be used to support commercial property owners' investments in energy-efficiency upgrades. Commercial property owners seeking to invest in alternative energy systems for on-site power generation would benefit from the Department of Energy Renewable Energy Loan Guarantees Program.
5. Rural housing service. The package provides an additional $500 million to existing U.S. Department of Agriculture Rural Housing programs. This service provides both a guaranteed loan program and a direct housing-loan program for those meeting the program's eligibility criteria. It has been reported that this level of funding will provide for an additional 192,000 homeowners.
6. Low-income housing grants. These grants allow 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.
7. Tax-exempt housing bonds. Tax-exempt interest earned on specified state and local bonds issued during 2009 and 2010 will not be subject to the Alternative Minimum Tax.
8. Energy-efficient housing tax credits and grants. To promote green jobs and energy independence, the new law provides state and local governments with $6 billion in energy efficiency and conservation grants for energy audits, retrofits and financial incentives. 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.
9. Transportation investments. The bill provides $46.7 billion to states and localities for capital investment for surface transportation projects, including highways, bridges, transit and rail. These investments will moderate traffic congestion and support a variety of transportation alternatives that will improve the quality of life of American communities and bolster the value of real estate. Loudoun County recently approved a $291 million list of infrastructure-related projects to submit to the state of Virginia, which is receiving nearly $4 billion from the new law.
10. Broadband deployment. The bill creates $7.2 billion in grants to promote broadband deployment in under-served areas and to map the availability of broadband service in the United States. Increased broadband access promotes economic growth and expands opportunities for home sales. A 2006 Commerce Department report determined that property values are 6 percent higher in communities where broadband is available.
