HR 1 First Time Homebuyer Credit

Among the many provisions covering nearly 1,100 pages of the ‘American Recovery and Reinvestment Act of 2009’, scheduled to be signed today by President Obama, most Realtors are curious about what the housing elements of the bill are. Here is a chart prepared by NAR summarizing the revisions to the First Time Homebuyer Tax Credit.

Home buyers who hoped for a $15,000 tax credit to buy a new home, as promised by the Senate, will be disappointed. A proposed $35 billion credit to support home sales was jettisoned in favor of a more modest $2 billion to $3 billion provision.

H.R. 1, the “American Recovery and Reinvestment Act of 2009,” passed the House on February 13, 2009, by a vote of 246 – 184. Later that day, the Senate also passed the bill by a vote of 60 – 38. The President is expected to sign the bill soon. The bill is a $780 billion package, with roughly 35% of the package devoted to tax cuts (mostly for 2009) and the rest to spending intended to occur in 2009 and 2010.

Homebuyer Tax Credit – The bill provides for a $8,000 tax credit that would be available to first-time home buyers for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009.  The credit does not require repayment.  Most of the mechanics of the credit will be the same as under the 2008 rules:  the credit will be claimed on a tax return to reduce the purchaser’s income tax liability.  If any credit amount remains unused, then the unused amount will be refunded as a check to the purchaser.

nar chart.

Full text of all housing related elements is here:

NAR / Stimulus Spin Doctors at Work

I know many of you were disappointed by the recent results (as far as they are known) with the massive Obama Stimulus Package for a number of reason (see Lenn’s excellent posts on the details). Of particular concern to Realtors was the push by NAR & CAR for us to contact our legislators and encourage them to vote for this measure when many of us felt it was not in either our best interest or the best interest of our country. The carrot often mentioned was the inclusion of the $15,000 home buyer tax credit that was widely anticipated to jump-start our nascent housing market and provide a true stimulus.

Given that motive, many of us held our noses and encouraged passage of a responsible stimulus package that eliminated the pork, the excesses, the waste and contained real provision for economic stimulus. Many of us understand that the collapse of the housing industry precipitated the wider declines in our economy and only by stimulating housing and jobs would we climb back out. Clearly that was not the prevalent sentiment among the Democrats (and 3 Republicans) in DC.

I’ve been awaiting the spin doctors at NAR to put a bright smiley face on this pig and here it is. President McMillans points are valid as far as they go. What is not addressed is the massive waste, the barrels of pork, the true lack of stimulus and the long-term cost to you and me that this bill will produce. Apparently even the large amounts of cash handed out by NAR was not enough to carry the day against the forces of greed, avarice, gluttony and corruption we are seeing played out in our nations capitol. It’s a sad day.

Dear Fellow REALTOR®,

Here’s our take on the Stimulis Bill and Treasury announcements made this week. We look at the Stimulis package AND the Treasury’s package holistically, in compliment with each other – mostly because that’s how the Obama team is looking at it. Your representatives, the NAR Board of Directors, asked us in November to do 4 things (with an unspoken but clearly understood mandate to PRESERVE what we already have). Here they are: 1) get loan limits raised for high cost areas, 2) make the $7,500 tax credit NOT a loan, 3) try to find ways to push interest rates down (which are higher than they should be due to systemic risk right now) by 200 basis points, and 4) help provide solutions to the foreclosure/short sale problem.

So here’s what we have achieved: 1) the loan limits will be raised to $727,000 in high cost areas, 2) the tax credit will be raised to $8,000 with NO payback [a true credit], 3) interest rates have come down 125-150 basis points, and 4) the bill has over $50 billion in it for foreclosure mitigation, with Geitners Treasury plan signaling that the second half of TARP and TALF will be used to mitigate foreclosures through a government guarantee, drive down interest rates by buying another $200-300 billion of mortgage paper from the GSES’s thereby freeing them up to do the same with new mortgages, and Fannie has just agreed to lift the cap of 4 investment properties eligible for loans and raise it to 10.

In addition, we preserved what we have – which some tend to forget is always on the table when these negotiations start up again – mortgage interest deductability, real estate tax deductability, and the $250,000/$500,000 cap gains exclusion (an overall package worth more than $100 billion and for some a very attractive funding source for their pet projects).

We did make a run at the $15,000 credit — and we would have loved to have gotten that or the Homebuilders $22,000 credit idea as well as their 5 year loss carryback deal, but they were considered too rich for this program. What it did do though is totally take the debate off of whether a tax credit should be reinstated at all (it expired last year) and whether it was a true credit or a repayable loan, and kept the conversation on how much it should be. It also kept the debate off of ‘what we are willing to give up to get a $15,000 tax credit’ and kept the debate again, on how much it should be. It’s pretty hard to complain when they give you what you ask for and you lose something you never had.

While we study the Treasury specifics on their major role in providing the rest of the housing solution — there is much more to come and we are working diligently with the Administration to help ‘unclog the pipeline’ and get capital flowing into housing again.

Charles McMillan

Thanks Charles – So we didn’t get what was on the table but at least they didn’t take away what wasn’t on the table. Gotta be thankful for small favors I guess.

Of course that’s just my opinion. I could be wrong.

The opinions in this commentary are strictly Gene Wunderlich’s personal opinions. While any reasonable and/or rational indivdual should agree wholeheartedly,
the opinons reflected herein may not necessarily be those of the Southwest Riverside County AOR, or any local or state government or other mental institution.

NAR Introduces Real Estate Today Radio Program

As announced at our recent Business Meetings in Orlando, NAR will be launching a nationally heard radio series called Real Estate Today next week. Initially the show will be carried primarily on XM/Sirius stations but they hope to be expanding the list of carriers to include more mainstream radio outlets as well. For a preview of the program, follow the link.

Last month, I sent you an e-mail explaining some of the things that NAR will be doing in 2009 to help our members succeed through these challenging times. Today, I am pleased to announce the launch of one of those initiatives – NAR’s weekly two-hour talk radio show, Real Estate Today.

Real Estate Today will premiere the weekend of February 14-15. We’ll show consumers why REALTORS® are the most credible, trusted source of real estate information, and convince them that using a REALTOR® when buying, selling, or investing in real estate is the smartest decision they can make.

We’ll also be building consumer confidence in the market and in the long-term value of real estate to help bring buyers back into the market.


Real Estate Today will air online at – visit the site anytime after the premiere to listen to current or past programs.

Beginning on February 14, satellite radio subscribers can hear Real Estate Today on America’s Talk, XM Channel 158, Saturdays 5-7 p.m. EST; Talk Radio, XM Channel 165, Saturdays 1-3 p.m. EST; and Stars, Sirius-XM Channel 102, Saturdays 6-8 a.m. and Sundays 9-11 a.m. EST.

If you’re in the Washington, D.C., area, you can listen to Real Estate Today on the show’s flagship station, 630 WMAL AM, every Sunday from 1-3 p.m., EST, beginning February 15.

We’re working to quickly expand the list of stations that will carry the program locally. Find out how you can help.

REALTORS® can also advertise on the show.

We welcome your input! If you have local market insights or program content suggestions, e-mail

Charles McMillan Signature
Charles McMillan, CIPS, GRI
2009 NAR President

Fannie Mae says Investors Can Now Finance Up To 10 Homes.

If you’re working with investors in this market, Fannie just made it possible for them to purchase up to 10 homes – an increase from the current limit of 4. Additional eligibility criteria will be required but at least it’s now possible.

Fannie Raises Limit on Investor and Second Home Borrowers from 4 to 10 Financed Properties

At the urging of NAR, Fannie Mae announced a new policy on February 6, 2009, to allow investors and second home buyers to own up to 10 financed properties. The new policy takes effect on March 1, 2009, and replaces the current 4-property limit. The restriction applies to the total number of financed properties, not just to the number sold to Fannie Mae.

Investor and second home borrowers that seek to own between 5 and 10 financed properties must meet additional eligibility requirements. Borrowers must have a credit score of at least 720. The maximum loan-to-value ratio is 70% or 75%, depending on specified criteria. Borrowers may not have any history of bankruptcy or foreclosure in the past 7 years, or any mortgage delinquencies of 30 days or greater within the past 12 months. Reserve and other requirements also apply.

Fannie Mae Announcement 09-02 (2/6/09) >

New RESPA Rules – Find Out What They Mean To You


New and (?) improved RESPA rules are scheduled to go into effect the b beginning of next year. The new rules apply to Realtors, lenders, title companies and almost everybody involved in a real estate transaction. You can follow the link below to find out what it means to you.

NAR Holds Webinar on New RESPA Rule

NAR held a webinar on Wednesday February 4, 2009 with RESPA Attorney Phil Schulman covering the major provisions of the new RESPA rule set to go into effect January 1, 2010. Schulman discussed the new Good Faith Estimate, the new HUD-1, and a number of other provisions important to real estate agents, brokers, and others in the broader real estate industry. Schulman also gave his perspective on the likely prospects of lawsuits by the NAHB and NAMB dealing with “required use” and yield spread premium respectively. The webinar is now posted on the web at the link below.

Listen to the Webinar
Good Faith Estimate

NAR Call For Action on Stimulus Package


Regardless of how you and I might feel about the bailout – errrr, stimulus package working it’s way through Congress right now, it is almost certain to pass. Too many people have too much invested in its passage, not the least of which is our new President. The best we can hope for is that they get some of the fat trimmed out of it, dump some of the pork and earmarks and all the worthless stuff which adds billions to the cost without producing a scintilla of stimulus to the economy.

I hope you agree that real estate is worthy of being included. After  all, the collapse of our housing market is what started this whole mess, an upswing in housing will bring us back out. So as long as the bill is going to pass anyway, at least let our Legislators know where our interest and their interest intersectssupport for strong housing. NAR has at least two critical elements of our 4 Point Plan included in the Senate version of the bill which would go a long ways toward restoring confidence in the housing market and getting buyers off the fence to take advantage of the phenomenal deals in our local market today. 

If you have not received and/or responded to the NAR Call For Action, please take a moment to respond to it via Gary Thomas’ email below. 

The Latest from NAR Voices of Real Estate


Answer the CFA and Support the $15,000 Tax Credit! Posted by Gary

Posted: 06 Feb 2009 02:59 PM CST

A new Call For Action will go out today regarding the economic stimulus package being debated in Congress. The CFA asks members of Congress to support the $15,000 tax credit for all homebuyers and to make permanent higher conforming loan limits. These measures will bring buyers back into the market and will have a real economic impact on our nation.

Everyone’s participation is crucial. You don’t have to wait to receive the email, either. Click on the Realtor® Action Center now to participate.

Yesterday, President Barack Obama wrote an editorial in the Washington Post urging Congress to pass the economic stimulus package, saying it includes “actions Americans need.”

Realtors® have an opportunity to tell Congress that the actions Americans need most are those that will help homebuyers and homeowners. These are the ones we’re advocating for in the CFA.

The Obama administration has also promised to deliver a separate plan to deal specifically with housing.

We believe any such housing plan must focus on stemming foreclosures and getting mortgage money flowing again. That was the main purpose of TARP – and one of the major disappointments of that program to date. Like it or not, a “bad asset” bank is an effective way to get problem loans off the books and to free up capital for new homebuyers. It should be considered in a housing plan, along with a mortgage buy-down program and various other NAR-supported proposals.

At the end of the day, low interest rates, tax credits, and other incentives are vital to stimulating the economy. But, they can only work if homebuyers can get a loan.

I love the work we do as Realtors®. That’s why I feel so strongly that we must take action in the political process going on around us. Realtors®, we need you to be a part of the action today by answering the CFA. — Gary Thomas, 2009 VP & Liaison to Government Affairs

All Stimulus All The Time

“We need to fix housing first” according to Republican Senator Mitch McConnell of the fabled Obama stimulus program. I suggest everybody pay attention to Sen McConnell – he knows whereof he speaks.

Watching the gyrations going on around the various stimuli/bail-out bills has been nothing short of breathtaking of late. It’s little wonder the average American is totally bumfuddled. I suspect most of the people voting on the bill are equally in the dark. Even at our recent state association meetings you really needed a scorecard to sort out the players.

Let’s see, our Senator Boxer, who has been a frequent target of Republicans, Realtors and damn near any thinking human being is suddenly a ‘good guy’ because she has stepped up to fill Hillary’s sensible medium heel shoes in sponsoring the Community Choice In Lending Act, otherwise known as “get Banks the Hell Out of Real Estate Act’. She has apparently become quite a friend to housing and as such has now gone off-limits and become one of the ‘good guys’.

Barney Frank, whose pronouncements on the health of Fannie & Freddie have been the butt of YouTube humor for months is also shown a friendlier side to housing – certainly a much more sympathetic countenance than former Chairman Oxley, who in spite of being a Republican with a Realtor wife was a constant thorn in the side.

Our Federal liaisons and NAR reps are tripping over themselves trying to figure out who’s who and who’s on our side at any given time on any given bill.

The stimulus bill itself, widely gaining disfavor, it still highly favored to pass in spite of the copious layering of lard slathered on it’s infrastructure. So rather than fight against the passage of this bill which will mortgage our future, and our children s future to the 3rd generation at least, everybody is lining up to make sure they get their share of the pie. Makes sense.

So if we’re going to make the best of a bad situation, we better all make our voices heard for Real Estate. Some of NAR’s 4 Point Plan appears to be making progress and that’s good. The GOP is said to be coalescing around the NAR/BIA plan to incent banks to lower mortgage interest rates to 4% – 4.5%. I kn ow NAR was actually pushing to get that to 3% for 1 year and 4% for a 2nd year, but if we can get a 4% mortgage and incent banks to actually loan the money, that’s a good thing.

Then there’s the plan to extend a $15,000 tax credit for homebuyers through the end of the year. The current $7,500 tax credit is faltering because it’s just for 1st time buyers and it must be paid back. This $15,000 credit would apply to all home buyers and would not needs to be paid back. This beats the BIA proposal which was for $10,000 but only for new home buyers and even trumps the NAR plan which was only $10,000 for every home buyer.

We also won a small and hardly noticed victory last week on GSE reform. We were finally able to get the upper loan limits increased just as the market was collapsing around our ears. But the increases were tied to a percentage of the median house price. Our concern was that now that housing prices have declined so precipitously in most major markets, the GSE limits would start ratcheting down as well. Last week they decided to keep the limits where they are for the time being – sparing us from once again fighting that battle when the market comes roaring back again.

And it will. You know it will. It actually probably would rebound faster if we could just keep the government from interfering continually. But regardless, it will be back. But in the meanwhile, Realtors would be damn fools to walk away from the smorgasboard of gratuitous pork. After all, housing precipitated the current slump, housing will lead the way back out. If we’re not at this table, we will be on the menu.

As I finish writing this I hear we may have reached a compromise on the stimulus package. Let’s see if Republicans sold their soul for a bail-out or if Demivcrats actually managed to forego some of their addiction to pork-fat. Film at 11 no doubt.

10% Participation Won’t Cut It In 2009!

You’ve all heard my rants before about how the real estate association, YOUR association, is only powerful for one reason – YOU. We are powerful as a grassroots organization and we have a great process in place that allows us to reach out and tap our representatives whenever our voice needs to be heard.

Unfortunately too many of you don’t use these tools. Not only do you not support your Realtor Action Fund through a measly $49 annual investment, you can’t even bring yourselves to exercise your right to free speech – FREE. It’s really pretty sorry and a sad commentary on the state of real estate professionalism today. Really. I’m re-posting this well written message from the NAR website because this guy summed it up perfectly as did the comment posted in response. Too many if us have simply become ‘list & sell’ Realtors who neither know nor care about the proud traditions of our industry or the amount of effort that goes into keeping our industry viable.

The connection between activism and results just doesn’t seem to be getting through to most of you. Maybe when your livelihood is taken away, maybe when every bank and insurance company can sell real estate, maybe when your reduced commissions are mandated by law and you are taxed at the time of every transaction you will wake up. Unfortunately by then it will be too late.

And what’s even worse is that those of you reading this aren’t even the people I’m aiming for. If you read this you probably get it and are one of the ones making a difference – unlike 90% of your counterparts who bring nothing to the party but just show up to eat and drink for free. Please feel free to pass this along to them – print it out and lay it on their desk, anonymouslyif you want. Imagine what we could accomplish if even 50% of our members took a professional interest in our industry and actually participated in the process.

Remember – as Pericles said in 500 BC – ‘Just because you don’t take an interest in politics doesn’t mean politics won’t take an interest in you.’  Smart guy that Pericles.  


Voices of Real Estate

National Association of REALTORS® 2009 Leadership Team, on what NAR is doing for you.

« 330,000 Letters to Congress, Posted by Charles | Main | One Plus One Doesn’t Equal Three, Posted by Gary »

Ten Percent Participation Won’t Cut It in 2009, Posted by Steve

Back in college, the first thing I learned in Econ 101 is that economies are built on confidence. Like many, I am hopeful that those who lead us on the federal level will really come through in the days ahead. They can both stimulate our economy as well as help us all feel better about the economy. Unfortunately, what I have come to realize in the past year is that those who govern us do not always understand the industries they seek to help, the markets they hope to improve, or the businesses they are trying to assist. Our representatives, from the president to the Congress, need to hear from us if they are going to govern effectively and improve our economy and our country.

Yet, in the midst of our biggest economic challenge in the past 80 years less than 10% of our Realtor® members in 2008 have contacted their representatives to inform, discuss, and promote legislation that would stimulate and change the market for the benefit of everyone.

Is this lack of participation the fault of NAR?

Perhaps. Just as NAR emphasizes adherence to the Code of Ethics, maybe we should be equally emphasizing continual involvement in our political process. Clearly, our high school civics classes did not instill the importance of participating in the governmental process, or more of us would be…

None of us can walk away from our responsibility as citizens. I have learned over the past year that even though I am one voice, I can make a difference. I have seen the “light bulb” go on when my Congressman finally got why a $7,500 tax credit-which really isn’t a credit but rather a zero-interest loan-is not a sufficient stimulus for someone to buy a home in today’s market. I can only imagine the light bulbs that might go on if all one million Realtors® communicated with Washington!

Real estate influences nearly 20 percent of our GNP. No industry is better prepared to present to government officials effective programs that will stimulate this sector of our national economy than us.

Come on, Realtors®! Let us help lead the way out of this economic mess and into a future that gives every American hope. Commit to getting involved. We’ll be sending out a new Call For Action next week. Either check the Realtor® Action Center or be ready to respond when it arrives in your email inbox.

It is, after all, a part of your business, not to mention part of being a good citizen. – Steve Brown, 2009 VP & Liaison to Committees

Posted on January 9, 2009 02:31 PM | Permanent Link



Boy, do I feel your frustration! Somehow the connection between activism and results doesn’t seem to be getting through. Moreover, the mentality remains…”list & sell”. As I’ve said in mosty of my Smart Growth presentations, “Most Realtors are very good at listing and selling homes…..but they haven’t a clue as to how that house got there in the first place!” Once that nexus is made, it’s amazing how participation increases. Unfortunately, too many of our members see what they do as a vocation, not a profession.

It’s also amazing how powerful participation can be. In a conversation with Barney at the MYM maybe three or four years ago, he said, “When I hear from 4 or 5 people on an issue it gets my attention. When I hear from a dozen, it’s a movement!” Somehow we need to get a cadre of people out there – RPIC – at the local association level to carry that message first to the DRs, then the membership at large.

Have a happy, healthy & prosperous New Year.

Posted by: David Wluka | January 12, 2009 11:05 AM

The opinions in this commentary are strictly Gene Wunderlich’s personal opinions. While any reasonable and/or rational indivdual should agree wholeheartedly, the opinons reflected herein may not necessarily be those of SRCAR, ActiveRain, The Valley Business Journal or any local or state government or other mental institution. 


NAR Thanks Realtors For 4 Point Plan Support

NAR President McMillan thanks Realtors for support in recent Call to Action.

Realtor Action Center

Members recently received a ‘thank you’ from NAR President Charles McMillan for our support of NAR’s Four Point Plan to Congress. The two week effort generated over 330,000 letters to Congress, one of the highest percentages of participation ever logged for an NAR Red Alert.

“On behalf of NAR, I want to thank you for being engaged in our legislative efforts to offer solutions to turn the current economic climate around and get things back on track,” stated McMillan. “I know many of our members are struggling to handle the current economic challenges. NAR will continue to work hard to ensure the right housing stimulus measures will be included in any ongoing legislation being considered by Congress and the new administation.”

This response was especially timely since there are many new members of Congress just starting their jobs on Capitol Hill this week who may not be familiar with the Realtor Grassroots organization or have an appreciation for the power of over 1 million strong. This serves as an introduction to them as well as a wake up call to some of the existing members who may have misplaced their priorities. 

There was an article in the paper today about the National Association of Homebuilders, who are requesting some of the bail-out money on behalf of their beleaguered industry. In it the statement was made that the NAHB is hoping Congress will lower mortgage interest rates to as low as 3% this year for a fixed rate as part of a housing market stimulus.

The NAHB had initially wanted an interest rate in the 4.5% range but the Four Point Plan discussed and voted on at our NAR Mid-winter meetings set a target rate of 2.99% for the first year (fixed) followed by a 3.9% rate for a second year (fixed). We felt that while a rate of 4.5% was certainly attractive and might stimulate some buyer activity, a tipping point would definitely be reached at 3% to would act as a catalyst to get the market moving again, increase absorption of excess inventory and speed our return to more normal market conditions. 

By the way, if you haven’t yet let YOUR voice be heard by Darryl Issa, Mary Bono, Ken Calvert, Barbara Boxer or Dianne Feinstein, you can follow this link to the a description of the Four Point Plan and the Realtor Action Center. It’s never too late to make the call – and it’s never too late to make YOUR $49 investment in the Realtor Action Center. At the federal, state and local level this will be a challenging year for Realtors trying to avoid becoming the target of revenue enhancement schemes by legislators. Invest $49 to help us protect the rest of your income.

Remember – If you’re not at the table, you’ll probably be on the menu.