Housing

The Home-Buyer Tax Credit Ends Today. So What?

That government program that pays people thousands of dollars to buy a house ends today.

The program has gotten a lot of attention, because it's simple to understand: Buy a house, get a break on your taxes (or, in many cases, a check from the feds). But, in the context of all the federal subsidies for the housing market, the program is tiny.

The government gave out more than $12.6 billion in credits through the program. Compare that to the following:

Fannie Mae and Freddie Mac, the cornerstones of the American mortgage market, are now wards of the state. Their bailout has cost the federal government more than $250 billion so far, according to the CBO's estimate.

Letting people deduct mortgage interest from their income taxes costs the government about $100 billion a year, according to the Joint Committee on Taxation.

The federal government insures mortgages worth hundreds of billions of dollars through the Federal Housing Administration. Under the latest version of the government's housing plan, the FHA will insure risky mortgages held by owners who are already struggling to make their payments.

The FHA is self-financing, and says it will weather the housing bust. But some economists warn that it could wind up needing a massive bailout.

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