What is the Housing Assistance Tax Act of 2008?
In response to the mortgage crisis and rising foreclosure rates, Congress passed the Housing and Economic Recovery Act of 2008. In addition to aid for borrowers, communities, and Fannie Mae and Freddie Mac, the new law contains tax provisions designed to encourage home ownership and the creation of affordable housing. These provisions, titled the Housing Assistance Tax Act of 2008, provide $15.1 billion in tax incentives, including a credit for first-time homebuyers, a standard deduction for property taxes, and an increase in the low-income housing tax credit (LIHTC). Various new provisions offset these costs, including a requirement that merchants report more information about credit card transactions to the IRS. • The act establishes a refundable credit for first-time homebuyers, equal to 10 percent of the purchase price of a home—up to $7,500—for homes purchased between April 9, 2008, and June 30, 2009. Homeowners must repay the credit—interest-free—over 15 years, starting two years
