Monthly Archives: February 2009

American Recovery and Reinvestment Act of 2009

While many economist, real estate agents and news anchors have commented both positvely and negatively about the recent passage of the American Recovery and Reinvestment Act of 2009, I feel that any plan that promotes buyers, especially first time home buyers who need the money the most to get started, will have a positive effect on the market; allowing them to invest in their future. The homes that they buy will create new move-up buyers in the market that first needed to get their home sold. To ultimately stimulate and stablize the economy, housing recovery legislation is the most important first step.

Below is the summary of the housing sections of the American Recovery and Reinvestment Act of 2009, as published on the National Association of Realtors website

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 signed the bill on February 17, 2009. 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.

Congress and the President have announced that a finance and housing package (including tax provisions) will be the next “big” initiative, so Congress has by no means finished its work as it affects the housing industry and REALTORS®. 

The bill includes the following provisions:

  • Homebuyer Tax Credit
  • FHA, Fannie Mae and Freddie Mac Loan Limits
  • Neighborhood Stabilization
  • Commercial Real Estate
  • Rural Housing Service
  • Low Income-Housing Grants
  • Tax Exempt Housing Bonds
  • Energy Efficient Housing Tax Credits & Grants
  • Transportation Investments
  • Broadband Deployment

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. Chart Highlighting the Major Modifications to the First-Time Homebuyer Tax Credit

FHA, Fannie Mae and Freddie Mac Loan Limits -The bill reinstates last year’s 2008 loan limits for FHA, Freddie Mac, and Fannie Mae loans.  These limits were equal to the greater of 125% of the 2008 local area median home price or $271,050 for FHA and $417,000 for Fannie and Freddie, with an overall maximum cap of  $729,750.  For the few areas where the 2009 limits were higher, the higher limits will apply.  In addition, the bill includes language providing the HUD Secretary with the discretion, if warranted, to increase the loan limit for any “sub-area”, area smaller than a county. The Secretary’s discretion is again limited by the $729,750 cap. These 2009 limits will expire December 31, 2009.
The inclusion of these loan limit provisions in the final bill is a victory for homeowners, buyers and Realtors.  While these new limits were included in version of the original stimulus bill approved by the House, the bill first approved by the Senate did not.  NAR’s Call for Action to both the House and the Senate prior to the final vote advocated strongly for the provisions which were then included in the final bill approved by both Chambers. Estimated 2009 FHA, Fannie Mae and Freddie Mac Loan Limits
Neighborhood Stabilization – Division A, Title XII of the bill provides $2,000,000,000 in additional funding for the Neighborhood Stabilization Program (NSP).  The NSP was created by the Housing and Economic Recovery Act of 2089 (Public Law 110–289) to provide grants through the Community Development Block Grant program (CDBG) to states and localities to address the problems that can be created when whole neighborhoods are decimated by foreclosures. The funds can be used to purchase, manage, repair and resell foreclosed and abandoned properties. In addition, the funds can also be used by states and localities to establish financing methods for the purchase and redevelopment of foreclosed properties.  After purchase the homes must be used to assist individuals and families with incomes at or below 120% of area median income. Twenty-five percent of funds must be used for households with incomes at or below 50% of area median income.  By leveraging their expertise in partnership with others from both the public and private sector, Realtors® in many communities have been making important contributions to their local communities’ neighborhood stabilization programs.
Commercial Real Estate – Commercial real estate is impacted primarily through those provisions of the bill focused on green building and energy efficiency as well as business tax incentives. H.R. 1 provides significant funds for state energy programs, which could be used to support commerical property owners’ investment in energy efficiency upgrades while commercial property owners seeking to invest in alternative energy systems for onsite power generation would benefit from the Department of Energy Renewable Energy Loan Guarantees Program.  Of particular benefit to small businesses would be certain provisions of the bill that provide tax relief in the area of bonus depreciation and capital expenditures, as well as the 5-Year carryback of net operating losses for small businesses.

Rural Housing Service – The bill provides an additional $500 million to existing USDA Rural Housing programs.  The RHS provides both a guaranteed loan program and a direct housing loan program for those meeting the program’s eligibility criteria. The direct loan program will receive $270 million while $230 million will be allocated for unsubsidized guaranteed loans. It has been reported that this level of funding would provide for an additional 192,000 homeowners.

Low Income Housing Grants – Allow states to trade in a portion of their 2009 low-income housing tax credits for Treasury grants to finance the construction or acquisition and rehabilitation of low-income housing, including those with or without tax credit allocations.

Tax-Exempt Housing Bonds – Tax-exempt interest earned on specified state and local bonds issued during 2009 and 2010 will not be subject to the Alternative Minimum Tax (AMT).  In addition, financial institutions will have greater capacity to purchase tax-exempt state and local bonds.

Energy Efficient Housing Tax Credits & Grants – To promote green jobs and energy independence, ARRA invests significantly in efforts to make homes and buildings more energy efficient.  The bill provides state and local governments with $6 billion in energy efficiency and conservation grants for energy audits, retrofits and financial incentives.  Through 2010, homeowners will be able to claim a 30% tax credit (up from 10%) for purchases of new furnaces, windows and insulation.  Another $5 billion will be available to modernize the nation’s electricity grid and install smart meters on homes that help to save consumers money.  There is also $5 billion for weatherization assistance for low income households and $2 billion for federally assisted housing (section 8 ) efficiency efforts.

Transportation Investments – The bill provides $46.7 billion to states and localities for capital investment for surface transportation projects including highways, bridges, transit, and rail projects.  NAR policy supports increased spending on the types of transportation infrastructure addressed in the bill with the exception of Amtrak and high-speed inter-city rail where NAR has no policy.  These investments will tend to moderate traffic congestion and support a variety of transportation alternatives which will improve the quality of life of American communities and bolster the value of real estate.

Broadband Deployment – The bill creates $7.2 billion in grants to promote broadband deployment in unserved and underserved areas and for mapping the availability of broadband service in the U.S. Any entity is eligible to apply for a grant including municipalities, public/private partnerships and private companies as long as they comply with the grant conditions. The grants are subject to “network neutrality” requirements to ensure that broadband networks be free of restrictions on content, sites, or platforms, on the kinds of equipment that may be attached, and on the modes of communication allowed.

The bill also charges the FCC is with developing a national broadband plan that shall seek to ensure that all Americans have access to broadband capability and shall establish benchmarks for meeting that goal.

These provisions are important victories for REALTORS because increased broadband access promotes economic growth and expands opportunities for home sales. A 2006 Commerce Department report determined that property values are 6% higher in communities where broadband is available.





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Join Us At the Howard Live! Home Show This Weekend

MARK YOUR CALENDARS — It’s the Howard LIVE! Food, Libations & Luxury Home Show at Turf Valley Resort on Saturday from 11-6 and Sunday from 11-5.

Enjoy a day full of Tastings of Signature Dishes from Area Restaurants to include Mini Crab Cakes, Gourmet Soup, Seared Tuna and Handmade Truffles, just to name a few. Combine that with recommended Pairings and Tastings of Fine Wines, Artisan Brews, and Spirits. Plus — Taste and Shop from hand selected Gourmet Food Purveyors who offer everything from Fine Cheeses, Handmade Chocolates, Infused Olive Oils and Gourmet Coffee, and much more. And it all starts as soon as you enter with the stellar Zodiac and Villa de Varda Vodka and Liquor Tasting Lounge! Place orders at the show for any of the Libations you Tasted and receive Special Howard LIVE! Discounted Rates from a selection of local liquor stores. A portion of the proceeds will be donated to a local charity.

AND THAT’S JUST THE BEGINNING! Not only do they have Great Tasty Treats, but they also have Great Design and Syle for everything for your Home – Over 150 beautifully appointed vignettes including sleek architecture, highline accouterments, custom design/build and fine furnishings. Discover one decadent surprise after the next as you make your way through each elegant ballroom.  All of this and more awaits you at the beautiful setting of Turf Valley Resort, Maryland’s premier hotel, golf, conference center and spa destination.

For directions, ticket information and event details, visit or call 410-612-9330.

The Northrop Team will be giving away fabulous prizes,  including a chance to win the Ultimate TV Giveaway, so make sure to visit our booth!

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Buyer’s Opportunities Abound!

by Susan Souder, ABR, Full Time Sales Agent

When is the best time to buy? Now!! Why now? Today’s real estate market “opens the door” for the opportunity for Buyers to have a wide selection of homes to preview. Interest rates are at the lowest in over 30 years and Sellers are prepared for the possibility of contributing toward a Buyers Closings Costs at the settlement. I have also noticed a One Year Home Warranty is offered by more Sellers in today’s market.

Working with an Accredited Buyers Representative gives the Buyers the comfort of an agent who is working for them.  Their professionalism and knowledge will lead you through all the stages of home buying. From mortgage approval, finding the right home, negotiating the offer, assisting with inspections then on to settlement and getting the keys to your new home!

Start your home search now!


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Supporting Carroll County Maryland Schools

The Carroll County School Education Foundation is having a Chocolate Ball Extravaganza and The Creig Northrop Team is a Sponsor. The event will take place on Valentine’s Day, February 14th, at the Westminster Riding Club and will include dinner, dancing and live music.  The event starts and 7:30 pm. A special VIP reception will take place at 7pm. Proceeds benefit the Carroll County Education Foundation’s Teacher Awards program. The Creig Northrop Team is a proud supporter of the communities where we live and work, and we look forward to seeing our Carroll County Neighbors there.

Tickets are $75 per person, or $100 for VIP. If you would like to attend, contact 410-751-3098 or

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