A quick look at the new Housing Bill signed into law today!
- A temporary increase in mortgage revenue bonds to refinance subprime mortgages. Lenders would write down qualified mortgages to 85% of the current appraised value and qualified borrowers would get a new FHA 30-year fixed mortgage at 90% of appraised value. Borrowers would have to share 50% of all future appreciation with FHA. The loan limit for this program is $550,440 nationwide.
- Permanent Conforming loan limit of $625,000
- First-time home buyer tax credit, which allows first-time home buyers to receive a tax refund worth up to 10 percent of a home’s purchase price, up to a maximum of $7,500. The refund serves as an interest-free loan and the homeowner is required to repay it in equal installments over 15 years.
- New regulator for Government Sponsored Enterprises to restore investor confidence in GSE loans and help the market and economy stabilize.
- Temporary raise in the loan limit for the Veterans Affairs home loan guarantee program to the same level as the economic stimulus limits until the end of 2008.
- Adjustment to the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA), allowing sellers to provide the non-foreign affidavit to a qualified closing entity and not just the buyer.
- The setting of minimum requirements for mortgage originators, which mandates fingerprinting of loan originators and establishes a nationwide loan originator licensing and registration system. The requirements do not apply to those only performing real estate brokerage activities unless they are compensated by a lender, mortgage broker, or other loan originator. States will have the ability to implement more stringent laws.
- The creation of a National Affordable Housing Trust Fund to help cover the cost of the FHA rescue plan for the first five years and develop affordable housing in subsequent years.
- The Treasury Department’s proposal to create a federal backstop program to insure the financial well-being of Fannie Mae and Freddie Mac.
- The FHA’s inability to insure loans that utilize a seller-funded down-payment assistance program. Down-payment assistance from family, employers and other nonprofits is still allowed.
- The Community Development Block Grant Programs’ $4 billion allotment for communities to purchase and refurbish foreclosed homes.
This is good news for home owners and future buyers, but there is a time frame associated with many of the provisions so if you are considering your options you will want to review them ASAP to ensure you are taking the right steps.
Kelly Turbeville is one of
The above information is provided as an opinion and is deemed reliable but not guaranteed.