Debate over the wisdom of the spending and tax breaks included in an $819 billion stimulus bill passed by the House Wednesday is expected to intensify as the legislation moves to the Senate.
But Realtors are welcoming the House’s treatment of tax breaks for first-time homebuyers and a proposal to restore the higher loan limits in place for Fannie Mae, Freddie Mac and FHA last year.
H.R. 1, The American Recovery and Reinvestment Act of 2009, passed the House in a 244-188 vote. While President Barack Obama was hoping the stimulus bill would receive bipartisan support, no Republicans voted for the bill, and 11 Democrats joined the 177 Republicans who voted against it.
In general, Republicans are opposed to many of the bill’s spending provisions, saying they are wasteful and have little to do with creating jobs — one of the legislation’s stated primary goals. Some Republicans say more tax cuts would be a better way to stimulate the economy and preserve and create jobs.
The National Association of Realtors welcomed passage of the bill, but said it could have gone further in providing incentives for homebuyers.
"We think this bill is a great first step in helping our economy on the road to recovery," NAR President Charles McMillan said in a statement. McMillan said Congress and the new administration must also refocus the use of Troubled Asset Relief Program dollars to add liquidity to the mortgage market and make mortgage loans more available.
Although the House version of the stimulus bill would eliminate the repayment requirement on an existing $7,500 tax credit for first-time homebuyers, it would not extend the credit beyond the current July 1, 2009, sunset.
NAR would like to see the credit expanded to allow all homebuyers to take advantage of it through the end of the year. The National Association of Home Builders and other industry groups say the credit should be larger.
The House bill would also grant the Secretary of Housing and Urban Development the authority to return FHA loan-limit floors and ceilings in high-cost areas to temporary limits in place for much of 2008. The bill would give the Federal Housing Finance Agency (FHFA) authority to allow Fannie Mae and Freddie Mac to purchase and guarantee loans of up to $729,750 in high-cost areas through the end of 2009.
That’s the limit that was in place during much of 2008 before temporary loan limits approved as part of the Economic Stimulus Act of 2008 expired on Jan. 1. While the $625,500 cap in place now is higher than the old conforming loan limit of $417,000, NAR wants to see the $729,750 cap made permanent.
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