As the whole world is facing the heat of Recession ,there should be some steps taken by the government ,in order to recover from it .In order to reform the Economy ,US President Mr. Barack Obama recently announced a $787 Billion Stimulus Package for First time Home Buyers.

While many believe Sub-prime Mortgage Crisis and over-extended first time home buyers played a large role in creating the current economic crisis ,but the Federal Government is trying to woo even more new home buyers with its stimulus package .The package is not just for first time Home buyers ,rather those who have not bought a home from three years are also eligible .The package has great benefits .If Successful ,the package will help in reducing the inventory of unsold homes and will also help in creating Employment.

The package includes three components:

Tax Credits

Down Payments Funding

Lower Interest Rates

Now if you buy a new home between Jan 1st and Dec 1st of this year, you can claim a tax credit of 10%(which can be up to $8,000), also you won't have to repay the credit .The credit must be claimed within 2 years of buying the home .The tax credit can be used to offset the property taxes and recover the down payments .But there is a condition that the house cannot be sold within 3 years in order to keep the credit.

The second incentive is for down payments .A typical down payment amount is 10% of the Sales Price .If you don't need to put down so much ,the government might offer you a loan with lower points ,which will help you in lower closing costs .But this scheme can be availed by individuals with Modified Adjusted Gross Income(MAGI) up to $75,000, or couples earning up to $1,50,000.Partial Credits can be availed by individuals with MAGI up to $95,000 and couples with MAGI up to $1,700,000.

Also tax rebate is offered on the loan's interest . It's different from the tax credit.

The groups of Americans ,who stand to gain the most from the Stimulus Package are : Wage Earners and Self-Employed ,First time Home Buyers ,Home owners looking to improve Home Energy-Efficiency ,Vehicle buyers ,The Unemployed ,Middle classers scheduled to get an AMT tax hit and the Students.

The US government foresees many positive benefits from the package announced .The package will help in creating new homeowners and revitalizing the Economy.