Contrary to preliminary indications, President George W. Bush ultimately acted in a manner consistent with election year politics and signed the Housing and Economic Recovery Act of 2008, or HERA, into law July 30. While many around the country will take great relief from its "foreclosure rescue" provisions, our neighborhoods, which have not experienced dire economic stress during recent years, will still welcome other components of the new law.

Principal among HERA's generally applicable provisions are a tax credit for new homebuyers, and significant increases in "conforming" and FHA loan limits.

Under HERA, qualifying home purchases made between April 11, 2008, and July 1, 2009, can yield first-time homebuyers a tax credit equal to 10 percent of the purchase price of the home, up to the amount of $7,500 ($3,750 for married individuals filing separately). To qualify as a "first-time buyer," the purchaser must have had no ownership interest in a principal residence during the three year period before the purchase of the home to which the credit will apply.

As is almost always the case, when the government giveth, it will usually taketh away as well. And so is the case with HERA. In fact, what Uncle Sam refers to as a "credit" is, in actuality, an interest-free loan, which must be repaid, albeit, without interest, over 15 years, or when the house is sold — if there is sufficient capital gain from the sale. However, HERA also provides that if the owner sells the home before paying back the full amount of the "credit," the remainder is to be repaid from the profit made on the sale of the home — that is, unless the profit is insufficient, in which case the remaining balance is forgiven.