Last week I mentioned that free money wasn’t cheap.  Well, both the House and the Senate passed the bill entitled “American Recovery and Reinvestment Act of 2009” on Friday the 13th – ironic, isn’t it? – and what we had thought might be a $15000 tax credit to home buyers in 2009 has been reduced to as much as an $8000 credit.  Here’s a breakdown of H.R. 1 from the National Association of Realtors:

Regarding the credit, the bill allows for an $8000 tax credit available to first-time buyers purchasing a house in 2009.  There’s no need to repay it, the credit will be claimed on your tax return, and it has to be your principal residence.  There are a number of other provisions in the bill (you can read the whole thing here), I think the thing that impacts Montgomery County the most is the reinstatement of last year’s FHA and Fannie and Freddie loan limits – $271050 for FHA loans, and $417000 for Fannie and Freddie loans … the impact here is simply that these loans are still available.  There’s also an increase in the tax credit available, now at 30%, for the purchases of new furnaces, windows and insulation to assist with energy efficiency in homes.

So – the $15000 is off the table, with as much as $8000 in its’ place.  I had a couple of people contact me last week to say they were excited about the proposed credit, and a few others say it ticked them off.  It’ll be interesting to see if it gets people off the fence.  Personally, I don’t think so.  I started the year working with too many buyers to think it’s going to add a ton of people into the makert.  My personal opinion is that they’ve already determined whether they’re going to buy or not, the tax credit is just a bonus if they decide to go through with it.  What do you think?