Tuesday, November 17, 2009

President Obama Gives Hope for Homebuyers and Unemployed

On November 6, 2009, President Obama signed a $24 billion economic stimulus bill which will provide additional unemployment benefits and give tax credits to prospective homebuyers. The bill also includes tax cuts for struggling businesses. The bill was implemented because of the 10.2% unemployment rate which is the highest since 1983. This results in the 4th unemployment benefit extension in the past 18 months.

According to House Majority Leader Steny Hoyer, approximately one third of the 15 million people unemployment have been out of work for at least six months.

The bill will provide another 14 weeks of benefits to those unemployed who have exhausted their benefits or will exhaust them by the end of the year. Unemployed residents who live in states where the jobless rate is 8.5% or higher will get an additional six weeks including Idaho, Pennsylvania, New York, West Virginia, Arizona, Mississippi, Ohio, Illinois, Tennessee, Alabama, Kentucky, South Carolina, Nevada, Rhode Island, California, Florida, and Georgia.

Presidential spokesman Robert Gibbs stated "But I believe -- I think most would tell you -- that the (unemployment) rate is more likely than not to get a little worse before it gets better".

The additional 20 weeks (14 plus six for high states) could provide a maximum of 99 weeks to those residents who live in high unemployment rate states.

The bill will extend the $8,000 first-time homebuyer tax credit which was going to expire at the end of November 2009 but has been extended to June 2010 provided a homebuyer signs a contract by the end of April 2010. The program will also provide a $6,500 tax credit for existing homeowners who buy a new home after living in their current residence for at least five years.

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