Bush’s Stimulus Package Would Have Positive Effect on Commercial Real Estate–Indirectly
- Jan 24, 2008
While the portion of the President’s proposed economic growth plan related to the housing industry is focused on homeowners, the commercial real estate industry would benefit, albeit indirectly. This afternoon, the plan took a major step toward passage, with Senate Majority Leader Harry Reid confirming that the House had reached a tentative agreement on the aid package, according to Reuters. “We’re going to take another look at it when it comes here (to the Senate),” Reid said, noting that that Congress would attempt to pass the $150 billion plan to the White House before a mid-February Congressional recess. According to the National Association of Realtors, elements of the plan designed to help stabilize the housing market, although consumer-focused, would help lessen the negative impact of the credit crunch on commercial real estate pursuits. “Commercial loans and financing packages are beginning to dry up,” Mary Trupo, public issues director for the National Association of Realtors, told CPN today. “By adding liquidity to the market, it will help not just individuals, but it will add capital to the financing market for commercial endeavors, as well. There will be more funds available for projects.” Another provision would also indirectly impact the commercial real estate market, the multi-family sector in particular, if it were actually part of the plan. “The way the stimulus package is designed now, there are no conforming loan limits,” Trupo said. “Because loans are above the limit of what Fannie Mae and Freddie Mac will insure, property owners, including multifamily property owners, pay higher loan costs. So increasing the conforming loan limits would have a more immediate impact.” According to an article by Martin Kady II in The Politico today, Rep. Barney Frank, chairman of the U.S. House of Representatives’ Financial Services Committee, said he would like the stimulus package to include an increase in the loan limits, which currently have a ceiling of $417,000, to a maximum of as much as $700,000.