The impact of $787 billion stimulus on the real estate.

The $787 billion economic stimulus package divided the people on two categories:1- pessimists who see the glass half-empty ,2- optimists who see the glass half-full. I am related to the second category based on hope and facts.The housing industry broke first and I don’t see any recovery for the struggling economy without giving special consideration to the housing industry that own the major potential to reignite the market and prop up the industry.Four things in the stimulus plan will have a direct impact on the housing industry:1- The stimulus package has a provision to change last year’s first time home buyer’s $7500 credit to a credit of $8000 which won’t need to be repaid. Last year’s stimulus package required the credit to be repaid over 15 years .A refundable tax credit for a home purchased in 2009 will bring new buyers into the market and decrease the number of foreclosed homes offered for sale.2- The stimulus bill does temporarily increase loan caps for Federal Housing Administration, Fannie Mae and Freddie Mac mortgages from $625,000 to $729,750.This loan caps change will be a big help for buyers in expensive areas. It will reduce the cost of borrowing and increase the demand for expensive existing and new homes.3- The stimulus plan is increasing the loan limits for reverse mortgages.Seniors are the most affected category in this struggling economy .they have lost so much of their savings and they didn’t have the ability to go back to work. The HFA Home Equity Conversion Mortgage(HECM) is now $625,500 while conventional loan limits are at $417,000.4- interest rates have come down 125-150 basis points.Low interest rates is a big help to reignite the market.Finally I invite you to see the glass as half-full. Your optimism can become a major factor in helping the recovery of our economy.Mona Ata