Duplex Chick

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Georgia Senator Johnny Isakson

Well, somebody in government gets it. So much so that I think Republican Senator Johnny Isakson of Georgia should be made oh, I dunno – the winner on American Idol. I don’t even care if he can sing.  The guy’s a rock star.

See, the senator introduced an amendment to the big economic stimulus package being cobbled together in the Senate. And it was such a great idea that they voted unanimously to approve it. What? Bipartisan support?

It’s easy to understand why. The amendment sunsets the current $7500 first time home buyer tax credit and replaces it with a non repayable tax credit of up to $15,000 or 10 percent of the purchase price of a home, whichever is less.

It gets better.

The tax credit is for anyone who buys a single family home, duplex, triplex or fourplex that they intend to occupy. Not just first time home buyers. Anyone.

There’s even more good news.

Taxpayers can claim the credit on their 2008 tax return. So, if the stimulus package passes and is enacted, you can buy a Minneapolis duplex the week after (which I’d be happy to help you do), file your taxes, and get money back; enough for more than a couple of mortgage payments.

The credit expires at the end of the year.

Of course, once the bill gets passed by the Senate, it has to go back to the House for approval; which means we’re not there yet, by any stretch.

So are southern senators just that much smarter? No. Isakson had the idea because for 20 years he worked as a Realtor.

In the mid 1970s, the United States faced a similar housing crisis when after a construction boom, interest rates rose and there was a three-year supply of vacant homes on the market. 

Isakson recalled that to solve it, Congress passed a $2000 tax credit for anyone buying a new principal sresidence.  Home values quickly stabilized, inventory dropped and the market recovered.

Anyone else suddenly have the urge to buy Johnny Isakson t-shirts and posters?

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I’m feeling a little giddy this morning.  There’s a reason. See, I read a report on the Realty Times web site about a letter sent to the Senate Finance Committee last week. And it made me want to skip like a little kid.

The story detailed how four trade groups had sent a joint letter to the committee, which is responsible for deciding all tax aspects of the stimulus package before it’s put before the entire Senate for a vote.

In the letter, the National Association of Realtors, National Association of Homebuilders, Mortgage Bankers Association and the Independent Bankers of America expressed their appreciation for the committees decision to follow the lead of the House Ways and Means Committee and make the $7500 first time home buyer tax credit non repayable.

However, the letter also pointed out by the time the bill is signed sometime this month, there will only be four months left in which buyers can use the credit. Therefore, they recommended the committee extend it unti the end of the year.

Here comes the good news. The groups went on to urge the committee to take two additional steps: expand the credit to ALL home buyers and authorize a mechanism where the $7500 credit could be used as downpayment money at closing. How liberating would that be to the real estate market?

In my opinion, those two incentives would do wonders and subsequently, the broader economy. Imagine. The Federal Government will pay you $7500 to buy a house. And you don’t have to wait a year to get the money.

So, what can we do? Well, since President Obama wants us all to help the country out of its tailspin, let’s tell Congress how great we think these ideas are. Believe it or not, when a Senator’s office gets several phone calls supporting an issue, they think it’s a mass movement.

We can make a difference. In Minnesota, this is especially easy. We have one senator to contact; who just happened to be at the White House for the president’s Super Bowl party. Just call or write Senator Amy Klobuchar.  Click on the link, then hit “contact” on her site.  Of course, a communication with the White House might not hurt either.

We can get ourselves out of this mess if Congress just does the right things.