A new home remodel program at the Department of Health and Human Services (HHS) is designed to increase home ownership and provide a tax incentive for new owners to do so.
The Homeowners Tax Credit program will offer a one-time tax credit of up to $25,000 for any renovation, regardless of the size of the home or type of renovation, according to the HHS Office of Housing and Community Development (OHCD).
The program will provide $1,000 in credit for any home remodeling with a $500,000 or greater investment, plus a $1 per square foot reduction of taxes.
The home remodeled under the program will also be eligible for a 10 percent reduction of property taxes.
The program, which will take effect in 2019, will be administered by HHS’s National Housing Investment Fund, which is overseen by HHS Secretary Tom Price.
The OHCD will administer the program through OHCD Regional Office, which serves communities in Kentucky, Tennessee, and West Virginia.
“I want to make sure we are building on the progress that has been made in terms of improving our ability to create jobs and build a stronger middle class, but we also want to continue to do this with the resources and incentives that we have to help create that economic development,” Price told reporters on May 27, according the press release.
“This is an opportunity to do both.”
The Homeowners Credit Program is designed as part of the Affordable Care Act, which allows for tax credits for home renovations.
The program will help ensure that the program does not increase costs to homeowners or reduce their ability to pay for housing, according HHS.
“As we continue to improve our ability and the incentives that are available to help home owners get the job done, we are also doing so to ensure that we do not lose the American dream to the next generation,” said HHS Secretary Price in a statement.
“In addition to the tax credit, the Homeowners Assistance Program is a way for people with modest incomes to save on their housing expenses.”
A program like this is very popular, said Kevin Denniston, executive director of the Institute for Work & Income.
“Homeowners have seen their incomes and their wealth increase significantly in recent years, so it is nice to see this program being extended to help them continue to achieve their goals,” he told Business Insider.
“It’s not just a matter of getting money out of the bank, it’s a matter in building the American Dream.”
The program was announced in December and was launched as part the Department’s Homeowner Investment Program (HIP).
The HHS Office for Community Development will administer HIP in partnership with the Department for the Blind, Disability, and Opportunity (DEO) and HUD.
The Homebuyers Tax Credit is the first program of its kind to provide tax incentives for home improvement.
The HOME program provides a one time tax credit up to the amount of the tax rebate amount.
The HHS Homeowners’ Tax Credit Program will offer the one-year credit for up to a $25 K-1 increase in home value, and the tax-free credit of $1 for any renovations.HIP will also provide up to 1 percent tax savings to eligible homeowners, regardless for their income, property values, and type of home improvement, as well as tax deductions for the purchase and refinancing of a home.
The home improvement program will be available through the Department and OHCD’s regional offices, but it is being administered by OHCD, not HHS.
The first two home improvement loans to be issued under the Homebuyer’s Tax Credit will be issued to first-time homebuyers and homeowners in the South, and those in rural areas.
The second Homebuyership Loan Program will be offered to homebuyer with income of $150,000 and more.
The loans will provide up $1 in mortgage financing.
The HUD Homeownership Loans program is designed for homeowners with incomes between 150,000-249,999.
The grants will help eligible homeowners with modest to moderate incomes, as opposed to those with incomes in the top quintile.
The loans will be made available to first time homebuy, first- time homebuilders, and first-timers who are eligible for tax relief.
The grant will cover up to two years of mortgage loan payments and other mortgage-related expenses.
Homeowners will be able to apply to receive the Home Buyers Tax Credits through the Federal Housing Finance Agency (FHFA), which will offer grants for the first time to first timers and those who earn under $50,000.
The funds will be used to help low and moderate income homeowners pay down their mortgage and to purchase a home for their families.
The HOME Program is part of a $6.2 billion stimulus package approved by Congress in May.
The House passed a $2.5 trillion spending bill that included $1.2 trillion in tax relief for the middle class in December.