Housing stimulus pays off for Utah

(Utah Pulse) All of the recent analysis of federal stimulus funds has missed one key point – the wise use of a small amount of stimulus money by Gov. Gary Herbert and the Utah State Legislature has benefited Utah's housing market, construction workers, homebuyers and the overall economy in a big way.

Through the Home Run Grant program, administered by Utah Housing Corporation last year, some 3,645 home buyers received grants for the purchase of newly built homes. Utah Housing Corporation is an independent public corporation created by the state of Utah with a mission to provide affordable housing opportunities to low and moderate income Utahns.

An economic analysis by James Wood, Executive Director, Bureau of Economic and Business Research, University of Utah, outlines the following key benefits from Home Run related house sales:

* Financial assistance to 3,645 home buyers in the form of $4,000 or $6,000 Home Run grants
* Total value of homes sold: $830.9 million
* Jobs preserved or created through the construction of homes: 19,508
* Total earnings created: $659 million
* Total fiscal benefits: $62.4 million

Home Run grants resulted from the governor convening the Housing Advisory Council, with a charge to create programs to stimulate the sale of the inventory of newly built homes. The objectives of the Home Run Program were two-fold: (1) Reduce the inventory, helping to stabilize falling home prices; and (2) get residential construction workers back on the job. The Salt Lake Chamber supported Home Run in a big way because business leaders know that housing led Utah and the nation into recession and housing will lead us out. Home Run grants were available in two phases. The first phase provided 1,652 grants of $6,000 each last March through June. The second phase provided 1,993 grants of $4,000 each last September through November.

Wood said job creation is where Utahns got “the biggest bang for the buck.” Preserving nearly 20,000 jobs is a key part of the economic recovery we are experiencing. In addition, builders and realtors reported that Home Run created a sense of urgency for many home buyers, motivating them to shop for new and existing homes, even if they weren’t eligible for Home Run grants. Homebuyers benefited in many ways beyond Home Run grants– an $8,000 federal first time home buyer tax credit, a relatively new $6,500 tax credit for repeat buyers, historic low interest rates and low home prices.

No additional Home Run grants are planned, but other programs and market factors that encourage home sales still exist. Utah Housing Corporation offers the Equity Now down payment assistance program, which expedites the $8,000 federal tax credit to first time buyers. Rather than waiting until they file their tax returns, homebuyers receive cash at closing. Once homebuyers amend their 2008 federal tax returns, or file their 2009 federal tax returns to obtain the $8,000 tax credit and apply the cash to their mortgage they get instant equity. This program is especially attractive because Utah Housing Corporation recently sold its first series of bonds to purchase mortgage loans since the collapse of the markets for mortgage revenue bonds occurred in September 2008. Mortgage loans are made by more than 35 participating mortgage lenders to low and moderate income first time home buyers at a 4.75 percent thirty year fixed rate. Information is available at www.UtahHousingCorp.org

All in all, the Home Run grant program was launched and administered in a way that has helped lift the economy, and that continues to make Utah the best-managed state in America.

Original Article