Stimulus Package Passes Congress: Gains for 50+ Housing
The "American Recovery and Reinvestment Act of 2008," signed into law this week by President Obama, contains a number of provisions that can benefit builders, developers, and marketers of 50+ Housing -- as well as future residents.
Provisions include:
- Loan limits for FHA-insured mortgage loans and GSE conforming loans are returned to $729,750 through 2009. This will allow buyers of more expensive homes to use loans that will lower their financing costs.
- Loan limits of $625,500 on FHA-insured reverse mortgages, which had applied only in high-cost areas, now apply nationwide. Since FHA is nearly the only lender left for such loans, the higher limits are welcome. This complements recent actions that allow reverse mortgages to be used by consumers who want to apply the equity in their current home toward the purchase of a new home, without waiting for the current home to sell.
- For builders, a bonus depreciation provision extends 50% expensing for 2009 capital expenditures (not including structures) for one year. In addition, bonus depreciation reduces the effective tax rate of utility companies, which reduces some Contribution-in-aid-of-Construction fees that some builders must pay.
Appropriations:
- Neighborhood Stabilization
$2 billion for purchase and rehabilitation of foreclosed and vacant properties to promote affordable housing.
- Rural Housing Insurance Fund
$200 million to help rural households purchase homes.
- Rural Community Facilities
$130 million to finance rural community facilities.
- Community Development Block Grants
$1 billion for community and economic development projects, including housing.
Small Business Benefits:
- Small Business Administration
$720 million for loan guarantees for small businesses.
- AMT patch for 2009
Extends the inflation patch for the AMT exemption amount to prevent more than 23 million taxpayers from paying AMT, and thus more tax.
- Small Business Expensing
Allow certain small business investments to be expensed instead of depreciated. Under the provision, businesses with less than $800,000 in taxable income could expense up to $250,000 in 2009 capital expenditures.
- Net Operating Loss Carryback Expansion
Provision expands the two-year carryback period to five years for 2008 tax year losses. Carryback expansion only applies to business with avg gross receipts of no more than $15 million for tax years 2005, 2006 and 2007.Potential Benefit: For small businesses, provides an immediate cash refund for losses in cases where the taxpayer has exhausted taxable income in the prior two tax years.
View the complete Summary here.
For more information, e-mail Robert Dietz or call him at 800-368-5242 x8285.
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