The US Treasury Department reports that after 200 days, and nearly $200 billion, the Recovery and Reinvestment Act is making inroads in reinvigorating the housing market. Direct funds, instead of credits for low-income housing, have been a boon to the sector - along with disbursements through a specially created Community Development fund. See the following article from HousingWire for more.
After 200 days of the Recovery and Reinvestment Act, the US Department of Treasury released a report detailing the spending of nearly $200bn, including efforts to develop affordable housing and boost first-time homebuyer demand.
The Recovery Act provided $2.3bn to propel the development of affordable housing in 37 states.
“In 200 days, the Recovery Act has made significant progress in revitalizing our communities and providing the basis for economic growth,” said Treasury deputy secretary Neal Wolin.
Currently, taxpayers can claim low-income housing credit for investments in construction, acquisition or redevelopment of low-income housing buildings, but economic conditions undermined those write-offs. The Recovery Act provided cash assistance of up to 34% of the state’s low-income housing allocation in lieu of the credits they would have received.
Florida led all states by receiving $578m in cash assistance. Indiana and Wisconsin followed with $164m and $139m respectively.
The Treasury also disclosed details on the $98m disbursed through the Community Development Financial Institutions (CDFI) Fund, which awards grants, loans and investments to certified organizations that serve low-income communities, individuals or businesses that lack access to mainstream banks.
New York received $16m for its 10 qualified organizations, followed by California, which received $12m for seven organizations and Vermont’s $6m for three CDFIs.
In 200 days, the Treasury marked for disbursement $153m in first-time homebuyers’ tax credit, which applies to purchases closed after April 8, 2008 and before Dec. 1, 2009. The Housing and Economic Recovery Act of 2008 established the credit of up to $7,500. The American Recovery and Reinvestment Act of 2009 increased the amount to $8,000 for purchases made in 2009 before December 1.
California’s estimated incremental amount to be paid totals $20.9m, based on the number of returns. Texas and Florida both had totals of $14m. The funds will not be disbursed until qualifying homebuyers file their 2009 income tax returns.
This article has been republished from HousingWire. You can also view this article at HousingWire, a mortgage and real estate news site.
