Q:

How were first-time homebuyers helped under President Barack Obama's 2009 economic stimulus package?

A:

Quick Answer

President Barack Obama's 2009 economic stimulus package included a number of programs that helped first-time home buyers, including grants to help rural Americans purchase homes. The package also included funding to help low-income families who were eligible for Section 8 buy homes.

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Full Answer

The 2009 economic stimulus offered a first-time home buyer credit worth $8,000 on federal income taxes. The tax credit was refundable which meant that home buyers would receive the money minus whatever was owed in taxes. If a home buyer overpaid that tax year, the entire $8,000 would be refunded. Certain income requirements needed to be met in order to qualify for the tax credit which lead to criticism about the effectiveness of the credit. The stimulus package also included additional funding for help wounded service members with purchasing homes and paying existing mortgages.

The Neighborhood Stabilization Program also gave first-time home buyers down payment assistance to buy homes. Applicants to the grant program had to meet certain requirements, including buying a foreclosed or abandoned home. Applicants also had to have an annual income that was up to 120 percent of the median income for the area in which the home was located. All applications for the program were made through grantees, such as housing improvement organizations and mortgage lenders.

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