For more information contact Bruce Hahn, 571-214-1013

Washington DC, February 12, 2009. The American Homeowners Grassroots Alliance (AHGA) today thanked members of Congress for reaching agreement on the economic stimulus package. The American Recovery and Reinvest Act includes a broad range of tax cuts and investments that will hopefully achieve President Obama’s and Congress’s goal of creating or saving 3.5 million jobs, and putting our nation back on track to economic recovery. The compromise between the Senate and House versions of the package must be approved by both bodies before going to President Obama.

“Congress deserves much credit for its speedy action and President Obama also deserves much credit for his flexibility on the specifics of the package,” said Bruce Hahn, President of the American Homeowners Grassroots Alliance (AHGA). “Both recognized that the economy continues to deteriorate rapidly. What is most important is to immediately put into place a recovery package that will help stop the bleeding,” he added. “Even if they didn’t get everything right or come up with a total solution, as is likely when you put together such a major piece of legislation in a hurry, we can go back later and make necessary modifications.”

The Act contains numerous provisions that will help homeowners with the economic challenges faced by so many of them. The creation of a 10% first time buyer’s tax credit will help quell the worries of potential home buyers fearful of another 10% annual drop in housing values this year. A first time buyer typically generates two additional upstream sales, which will help many existing home sellers who have been unable to find buyers. It will also help clear the bloated inventory of unsold new homes and foreclosed properties owned by lenders.

Rural and economically distressed areas where starter homes can be had for $75,000 or less will receive the full benefit of the 10% credit, which is capped at $7,500. In those areas AHGA expects the credit will provide a substantial boost to the local housing market. Buyers of starter homes in more expensive urban and suburban markets, where starter homes can cost twice that amount or more, may find the incentive proportionately less attractive because of the cap. On a $75,000 home the 10% credit will cover the risk of a 10% decline in the market. Because of the cap, the credit would only protect the buyer of a $150,000 home against a 5% drop. If the credit proves to be less effective at stimulating sales in urban or suburban markets, AHGA will urge Congress to consider raising the cap so as not to penalize homeowners who live in more expensive housing areas.

Many of the other stimulus provisions will help homeowners, other consumers, and the economy:

● Grants and other funding to make homes and buildings more energy efficient and massive investments in the transportation infrastructure will help homeowners save money and create jobs.

● Individual income tax cuts and modifications to the alternative minimum tax will enable homeowners to rebuilt their savings and offset their loss of home equity.

● Extending home energy efficiency tax credits for such things as the purchase of new furnaces, insulated windows, doors, and/or insulation will help homeowners save money and help the environment.

● Modernizing the health records system through technology will reduce medical costs and lead to better patient outcomes.

● Funding to expand high speed broadband services to unserved and underserved communities will enable more homeowners to work from home, thereby helping the environment, and helping more homeowners enjoy the growing number of other benefits of this increasingly important technology.

There are many other direct and indirect economic benefits in the stimulus package. The package contains provisions supporting improvements in education, and other components related to the environment, health care, and the needs of workers hurt by the recession. AHGA is urging its members to contact their Representative and both of their Senators and ask them to support the package.

The economy has declined substantially since the economic stimulus was first proposed last summer. A growing number of economists believe that the pending package will not be enough to turn the tide.

Will there be a next step in Congressional efforts to address the ailing economy? In a meeting this morning Senator Ron Wyden (D – OR), a member of the Senate Finance Committee, told AHGA’s President that he believes the Senate will give the package some time to work before revisiting the issue. In the meantime he expects that his committee will work on his bipartisan health reform package that has received support from Republican senators as well as consumer and business groups. The package would provide universal health insurance but would preserve consumers’ right to choose health providers and guard against business cost increases.

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The American Homeowners Grassroots Alliance is a nonprofit consumer advocacy organization dedicated to assisting homeowners better understand the significant economic issues affecting their home and their lifestyle, and empowering them to make their voices heard by state and federal officials.