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Senate OKs home buyers bill $6,000 GRANT on New Construction

Posted by UtahCribs, Real Estate, Homes on March 11, 2009

Senate OKs home buyers bill

By JEFF DEMOSS SALT LAKE CITY —

The Utah Senate has approved a proposal to give buyers of newly built homes a $6,000 down-payment grant using funds from the federal economic stimulus package. Senate Bill 260, sponsored by Sen. Scott Jenkins, R-Plain City, aims to stimulate sales from an excess inventory of new homes on the market left over from a building boom that came to a halt about two years ago. The funding would come from the $10 million Utah is slated to receive for housing assistance from the American Recovery and Reinvestment Act signed into law last month. Funds would be used to help more than 1,600 buyers on a first-come, first serve basis. Existing homeowners would be eligible as well as first-time buyers. “The goal is for people to buy the existing inventory out there,” said Sen. Greg Bell, R-Fruit Heights. “We don’t care if it’s their first time, as long they’re buying a new home that’s already on the market.” Grants would be awarded through the nonprofit Utah Housing Corp., the entity created by the state to administer housing assistance programs. The grants would only be available to buyers obtaining 30-year, fixed-rate mortgages. Individuals making more than $75,000 annually, or married couples making more than $150,000, would not be eligible. Sen. Jon Greiner, R-Ogden, said a recent tightening of lending standards has prompted lenders to raise their required down payments, and few houses can currently be purchased with a $6,000 down payment. But when combined with other incentives, the grants could be a powerful tool for reducing excess inventory, said Mike Ostermiller, chief executive of the Northern Wasatch Association of Realtors. “You can debate the effect of $6,000 by itself, but when you combine it with the $8,000 federal tax credit, record-low mortgage rates and ridiculously low prices, this could have a big impact,” Ostermiller said. The University of Utah’s Bureau of Economic and Business Research estimates that such a program would create 8,000 jobs in Utah’s housing sector and add $27 million in income tax revenue to state coffers. While the proposal doesn’t directly address the inventory of unsold, previously occupied homes on the market, Ostermiller said it will stimulate activity that will be good for the market in general. “The most important thing is getting some movement in the market,” he said. “Your chances of selling your home are much better if this eats into the new inventory.” The Senate voted 22-to-5 Monday in favor of SB 260, which Jenkins said could go a long way toward fixing the Utah housing market. “We hope it has a positive effect. We will see where it takes us.”

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9 Responses to “Senate OKs home buyers bill $6,000 GRANT on New Construction”

  1. I was thrilled when I read this. I am glad to hear some of this “Stimulus” money will be making it into consumers hands. So if I have all of my facts straight, this means if you are buying a new construction home, (which they are defining as a home that has never been lived in) you are qualified to receive a $6,000 Grant, plus the $8,000 tax credit that you do not have to pay back as long as you live in the property for 3 years.. Finally a plan that may spark some activity in the market. Good to hear.
    https://utahcribs.wordpress.com

  2. Can you believe that you could get up to $14,500 free money when you buy a new house right now. SO…..we decided 100% financing got us into a HUGE bubble, so now instead of borrowers SAVING their own $$ the government will pay it for you– Sweet Country we live in.

  3. This is a great idea. We need to get the word out!!

  4. Brad Miles said

    Hopefully this gets a few people off the fence. Combine that with low interest rates and the tax credit and this could end up being one of the best times to buy ever.

  5. Chris Green said

    Good! Maybe some of the people will wise up, hop off the fence and get serious!

  6. Loan Funds said

    The Senate will not consider small tax extension bills on an individual basis, according to senior tax writers on the Senate Finance Committee. Loan Funds

  7. It already IS one of the best times to buy…I cant imagine this making much of a difference. I’m not being negative, I have just seen how people are so scared and I don’t think 6k is going to fix it.

    If you haven’t bought already, you have missed the low.

    • Indifferent—- Agreed, people do have an interesting mind set currently. Everyone is waiting for that “perfect Moment” which I am not sure exists. I do however believe that just maybe these incentives will restore a little confidence into the market as a whole. Confidence will go a long way. We are not looking for a big jump in the market just some stabilization would be nice. 🙂 Thanks for the comment.

  8. Neershats said

    Fantastic article=D Hope to definitely visit again

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