Taking Advantage Of The Economic Stimulus Package

Congress has recently raised the mortgage limits for single-family homebuyers in high cost areas as part of an economic stimulus package. Although you can purchase property cheaply in other areas of the country, taking advantage of this stimulus package in areas that are more expensive means a long-term return that will pay off for years to come.

What The Stimulus Package Can Do For You

The Federal Housing Administration (FHA) limits allow you to buy a two-unit property in a high cost area at less than one million dollars, with loans for up to $1.4 million for four-unit properties. If you are buying in a “special exception” market, such as Alaska, Hawaii, Guam and the U.S. Virgin Islands, the limits go higher. Two-unit properties increase to $1.4 million, whereas four-unit properties jump to $2.1 million.

Even though foreclosed properties mean it is a good time to buy, the opportunities for investors with this package are especially appealing. The focus is on single-family homes, but higher limits also extend to some properties with two, three and four units. By buying these buildings, investors can live in one unit and rent out of the rest.

To reap the benefits of this plan, buyers in California, New England and parts of Florida have to take action before the stimulus ends on December 31 of this year.

How The Stimulus Package Works

This package helps investors buy up property, though it is especially wonderful for those who want to buy in expensive markets. You can qualify for a loan using a portion of your anticipated rental-unit income. As a result, you do need to have a huge income in order to buy three and four-unit properties in those pricey local markets like Manhattan or San Francisco.

If you plan to rent out the units, your tenants’ payments should cover the mortgage costs. Like other FHA-insured loans, the mortgage will have a fixed 30-year term and need documentation with appraisals. If you ever considered buying and renting, now is definitely a good time to invest, particularly in high cost regions. Due to the congressional stimulus package, you can finance pricier real estate than before.