It looks like the Utah legislature is trying to put Federal "stimulus" money to use. Senator Scott Jenkins from Plain City has written an interesting bill targeting new-home inventory.
Click here to read the actual text of the bill. It is an easy read.
The bill creates a program whereby buyers of newly constructed homes can receive a $6,000 grant from the state. There are only a couple of qualifiers:
1. The financing on the home must be with a 30-year fixed mortgage.
2. The purchasers cannot make more than $75,000 if a single person or $150,000 if married.
Although this program is not much in dollar terms, it will help move a few existing new homes. I seriously doubt it will create much demand for new construction however. The incentives are not enough, plus most people that purchase new construction are moving up to it. That means that there needs to be a buyer for their prior existing property. This program does nothing to provide an incentive for that necessary part of the transaction.
However, the bill defines a home as a "newly constructed, never-occupied residence in Utah". By this definition, I believe townhomes qualify. There are many new townhomes sitting on the market right now that I would qualify as starter homes. This program may be helpful in eliminating that glut of inventory.
Although I disagree with the principle of federal "stimulus", since the money is here, it would be wise for us to use it for the maximum possible benefit that it can create. This program may be a good use of those funds.
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