The economic stimulus package that recently passed through Congress and President Obama’s desk was one of the biggest spending bills to ever go through our country. As different aspects of the legislation get enacted, we continue to learn about new provisions that will provide assistance to struggling tax-payers. Most know about the $8,000 first-time homebuyer tax credit in the legislation, but there’s other legislation that helps homeowners in the legislation as well, especially for military families.
Inside of the $787 billion piece of legislation, there was $555 million allocated to the Secretary of Defense to establish a “Homeowner’s Assistance Fund” which would reimburse military families that have to sell their homes at a loss because of re-assignment and needing to move for a medical reasons. Surviving spouses of soldiers killed in action would also be able to benefit from the legislation, as would soldiers that own homes near military bases that are closing forcing them to relocate.
Since military families often need to move every three to five years because of re-assignment, they often have to sell their homes at inopportune times in the housing market. The Homeowner’s Assistance Fund would reimburse military homeowners for any losses in property value that they get hit with when selling their homes.
The specifics of the bill require a potential recipient of the subsidy to have purchased their home before July 1, 2006, the date at which the housing market is considered to have peaked. The legislation would also pay up to 95% of the loss taken by the homeowner, but that doesn’t guarantee that each recipient will receive that full 95%.
The bill would also allow the Secretary of Defense to acquire the title a military family’s property with the money. Essentially, the Department of Defense could use some of those funds to buy homes from military families that need to move, however it’s unclear as to the Department of Defense will choose to use the funds to do that.
The total cost of these provisions come in at just under $555 million (although that’s just an estimate), which is less than 1% of the total cost of the stimulus package.
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