Return to the VA Loan Library

Helping the Housing Market

Tax incentives and other reasons the American Housing Rescue and Foreclosure Prevention Act will help the housing market.

The American Housing Rescue and Foreclosure Prevention Act will help homeowners and potential home buyers by offering many incentives to refinance and purchase new homes. Through this new Act, the government hopes to stimulate the real estate market so the areas of the country where home prices have dropped the most will have a chance to recover. This is why they are offering multiple tax incentives for homeowners.

Some of the ways in which the government is using tax incentives to help stimulate the real estate market include:

• A refundable $7,500 tax credit. This credit is only available for first-time home buyers and it is based on a sliding scale based on income. The full tax credit is given for individuals who make up to $70,000, and it begins to decrease for incomes above this amount. For people applying jointly for the loan, the income limit is raised to $140,000 before the tax incentive amount begins to decrease.
• Homeowners who take the standard deduction will get an increase of $350 deduction on their property taxes. If filing jointly, the deduction is $700.
• Veterans or those service members returning from overseas will have one full year to readjust before their lender will be able to file foreclosure proceedings on their property. The old limit was three months, and the new limit of one year was put in place because of the large number of Veterans who were losing their homes.
• Low income families will see a temporary increase in the low income housing tax credit.

Get Started With Your VA Loan Request

All of these tax incentives will work to give homeowners and buyers more motivation to keep their current home or purchase a new home. The government is hoping that these tax incentives will help jumpstart the real estate market.

See a related article: VA Benefits Continue to Improve