How Homeowners should Benefit from Economic Stimulus Plan

by Marcus Pickett

See if We Have Top-Rated
Home Improvement Professionals in Your Area

Related Articles

  • Find Top-Rated Pros
Home Maintenance

Now that Americans know the details of the American Recovery and Reinvestment Act, we need to do our best to make sure every dollar we spend counts. More than just monitoring the actions of the administration, governors, and legislatures, knowing what opportunities this economic stimulus package may offer you can be just as important to ensure this money isn't wasted. For homeowners, this starts by understanding how the following programs apply to you and how these funds will trickle into your neighborhood.

First-Time Home Buyers Get $8,000 Tax Credit
To bolster Americans' ability to purchase a new home, this provision creates an $8,000 tax credit for first-time home buyers. Reduced from the $15,000 mark originally proposed, this credit is still substantial and substantially different than previous tax incentives. Unlike last year's $7,500 home buyer tax credit, this tax credit doesn't need to be repaid. Certainly, if you were already interested or planning on buying a home this year, you can count yourself as one of the clear winners of the economic stimulus plan.

Undoubtedly, this piece of the stimulus package will be closely watched. Foreclosures and housing prices are demonstrably weighing on the economy right now, and the hope is this tax credit will raise home prices. Yet, many economists are skeptical about the ability of an $8,000 tax credit to raise home prices. Others claim if the price does climb it will mean nothing more than a temporarily re-inflation of a housing bubble that has already popped. Regardless, the tax credit is likely to motivate homebuyers who are wary about buying a home before the market has bottomed out.

To read a more in-depth analysis of the pricing forces within the housing market, click here

Expansion of the Weatherization Assistance Program
The Weatherization Assistance Program provides basic home improvements to qualifying households to reduce energy dependence, improve the environment, and to promote economic development in low-income neighborhoods by increasing homeowners' spending power. Moreover, this program has developed many of the energy-saving technologies that are used every day by home improvement contractors. The economic stimulus package appropriates $5B for expansion of this program. Allocated funding is decided by the Department of Energy, but the states administer the weatherization process to low-income households. The additional funding will go toward raising the maximum income level and maximum assistance for qualifying households.

As a measure of the program's success, for every dollar government spends on weatherization, households receive $1.83 in energy savings. This might sound nifty, but what use is it to the average American homeowner? Well, if this program also funds state-sponsored energy audits. If you're unsure about where your home might be needlessly and expensively consuming energy, this increase funding makes it more likely you can receive a free energy audit for your home. To read more about the Weatherization Assistance Program and whether your household might qualify for assistance, click here

Change the look and feel of your home! Use this link for a custom

Home Remodel

Green Tax Credits and Spending Programs
Although most programs won't have the direct effect of the WAP, there are dozens of green provisions in the stimulus package. Perhaps the most ambitious green initiative is the $11B earmarked for modernizing the electricity grid, critical to integrating renewable energies to the power grid. Notably, this figure represents only a down payment that must be combined with other investment funds, as experts put the price for comprehensive grid modernization near $200B.

There is some $9B in new government spending for everything from general renewable energy research to consumer rebates for energy-efficient appliances. There are also tens of billions of dollars being spent on energy-efficient transportation, including a tax credit of up to $7,500 for plug-in hybrid vehicles, $8.4B for public transit projects, and an additional $8B for high-speed rail projects. While these funds don't stand to directly impact homeowners, they may influence demographics and the composition of urban populations. Improved public transit should continue to promote urban renewals across the country, as homeowners continue to look for ways to reduce the ever-increasing costs of transportation.

To see a more detailed account of green tax credits and spending programs, click here

Homeowners: Start Planning Now
Whether it's the purchase of a new home or renovating your current home, you can start house hunting, talking to home improvement contractors, and contacting local government agencies about your new housing plans. Ideally, you would buy a new home along a route intended for a public transit project that will revitalize the local neighborhood, and with multiple tax credits, you could complete an energy-efficient renovation on this new home to generate a patriotic and lucrative real estate investment.

Marcus Pickett is a professional freelance writer for the home remodeling industry. He has published more than 600 articles on both regional and national topics within the home improvement industry.