Show Me The Money

The much talked about Stimulus Package that Congress worked on last week has a housing stimulus component to it. In that bill that President Obama is likely to sign tomorrow, there is a $8,000 credit available to first time home buyers. Here is how we think this is going to work out. The credit will be given to the homeowner who meets the following criteria. Any single family residence, that will be used as a single family residence qualifies for the credit. The credit is available to individuals with adjusted gross income of no more than $75,000 or $150,000 for a joint return. The purchaser or their spouse may not have owned a principal residence 3 years prior to this purchase. There is no repayment required of the credit for homes purchased between January 1, 2009 and December 31, 2009. If the home is sold within three (3) years of the purchase the credit must be returned.

So let's give an example of how this will work. If you have not owned a principal residence for the last 3 years and you decide to purchase a home that is $160,000, and you and your spouse make a combined income of less than $150,000 you are eligible for this credit up to $8,000. When you file your taxes and your refund was $1,000.00 you would receive back from the government a check for $9,000.00.

Do you think this is a good idea or a lousy idea? Let me know. I am interested in your feedback.