Under the 2009 program, the house you buy must be used as your principal residence, not a second home or investment property. But that residence can take a wide variety of forms, including, "houseboats, housetrailers, cooperative apartments, (and) condominiums" among others, according to IRS rules.
Congressional sponsors of the revised tax credit program offered no projections of how many additional home sales are likely to stimulated this year by the non-repayable feature, but the National Association of Realtors has weighed in with its own estimates: 300,000 more houses will sell during 2009 as a direct result of the credit. Add in the so-called "ripple effects" -- higher expenditures on furnishings, appliances, remodeling materials, brokerage commissions, moving costs, etc. -- and the economic jolt could be significant over a relatively short period.
Other sections of the stimulus package that haven't received much attention, but still could benefit large numbers of owners and buyers, include:
-- An increase in the maximum mortgage amounts permitted for fundings by Fannie Mae, Freddie Mac and the Federal Housing Administration - essentially a rollback to 2008's high-cost area limits, which range as high as $729,750 in the most expensive markets of California and portions of the East Coast such as metropolitan Washington, D.C. That's potentially important for all buyers -- not just first-timers -- in those areas because it should open the door to lower interest rates on the big loans they need to purchase even median-priced houses. The current high-cost area limits top out at $625,500.
-- Hefty increases and extensions for tax credits to stimulate "qualified energy efficiency improvements" in existing homes. The expanded credits cover improvements to air-conditioning systems, or natural gas and propane furnaces and water heaters.
-- $2 billion in additional funds for local governments and nonprofit groups to enable them to acquire and renovate foreclosed and vacant dwellings that are depressing property values -- and raising crime rates -- in urban and suburban neighborhoods hit hard by the housing and mortgage messes.