So the housing stimulus bill was signed into law yesterday. Is it good? Is it bad? What does it mean? (Yes, yes, and we’re gonna try to sort that out.)

First, the practicalities as they affect REALTORS®. Well, practicality, because there’s only one, but it’s a biggie: that $7,500 tax credit. It’s basically a 15-year interest-free loan for first-time homebuyers from your dear old Uncle Sam.

To take advantage, you must not have owned your home during the three-years before the purchase; you must buy a home between April 9, 2008 and July 1, 2009; and you must have an income less than $75,000 ($150,000 for married couples).

good_bad_ugly_1 So many, many people will qualify, and it’s something you need to bring up when you’re working with first-time buyers and trying to counsel them in an uncertain market.

And that, of course, is the idea: Give folks an interest-free loan and hope it convinces them to buy a home. But the housing bill is more complicated than that, and it has some notable downsides — and its share of critics.

The good

Offering first-time buyers an incentive in the form of, essentially, an interest-free loan, should help increase home sales, according to NAR. At the very least it could push some ‘fence-sitters’ over the edge and into home ownership. Supporters say even a small increase in home sales could be enough to jump-start the housing market.

The bill also extends a line of credit to Fannie Mae and Freddie Mac, and increases oversight of the companies — both these things should restore confidence in the secondary mortgage market that’s been clobbered by its over-enthusiasm on housing prices.

And the bill also allocates $300 billion, through the Federal Housing Administration, to let the government back cheaper mortgages (to bail out homeowners who can’t afford theirs) and for local governments to repair foreclosed homes and increase property values. “Mortgage relief” is a phrase that thousands of people will love to hear as they try to cope with skyrocketing payments on ARMs that reset on homes that lost value.

The bad

All these programs cost big money, money the government doesn’t have. And when government spends too much, you get inflation. Critics also point out that much of this money is going to bail out private corporations and irresponsible homebuyers, rather than letting the free market determine their fates. Many of the same critics say that this economic adjustment is necessary, and that meddling in the housing market with artificial stimuli will only postpone a full economic rebound.

(There are some other buried measures in the bill that haven’t gotten as much press, but should at least raise an eyebrow. For example, anyone working in the mortgage industry will be fingerprinted. )

While it’s easy to say that the housing bill is “great for America” or “a long-term disaster,” the reality is that, in any legislation this complex (600 pages!), there’s good and bad. And trying to predict its long-term effect on a monster economy like ours is all but impossible. So hang on.

Out on the Net

RealCentralVA brings us Ron Paul’s take: “[T]oday’s vote on the House floor dealing with the housing bubble there’s no sign that we’re about to tighten our belt and live within our means.”

From the Piedmont Real Estate Blog: “First, you should know that almost no one really likes this bill. But even those who don’t will generally admit they think it’s a necessary evil.”

Marc, a REALTOR® in Florida, offers his perspective: “It’s being touted as a panacea for our mortgage and housing market ills, but unfortunately comes nowhere near to being such.

Musings of Caroline Virginia says: “The Housing Bill that President Bush approved on July 30, 2008 appears to be a life preserver for many communities.”

Matthew Kelly of Geek Estate offers a detailed list of suggestions.

And the National Association of Home Builders has lots of information, too.