Housing Bill: Buyer Credits, Loan Limit Increases, FHA Changes
July 23, 2008 by Katie Wethman · Leave a Comment
Breaking news on the latest version of the Housing Bill, now on a fast-track to a vote and onto the President’s Desk, where he has signaled he will sign it. The newest developments:
- Permanently increase the conforming loan and FHA loan limits (previously $417,000, and increased to $729,750 in the Washington, DC, area in 2008) to 115% of the median home value – $625,000 in our area, effective 1/1/09
- Increase the FHA down payment from 3% to 3.5%
- Provide a first time home buyer “credit” (really, more like an interest-free loan, to be repaid over 15 years by the buyer) of up to 10% of a home’s price, to a maximum of $7500. The refund is gradually reduced for single filers with AGI above $75K ($150 for joint). It applies to home buyers who purchased between April 9, 2008 and July 1, 2009.
- Bar down payment assistance programs like Nehemiah
- Allows the Treasury to offer Fannie and Freddie an unlimited line of credit over the next 18 months to serve as a ‘backstop’ and provide liquidity. The bill also creates a regulator for the two companies.
- Gives $4 billion in grants to states to buy and rehabilitate foreclosed homes
- Create an FHA program which will help strapped homeowners who are upside-down. The program will require lenders to write down loans to 90% of the appraised values and pay an FHA fee in exchange for an FHA guarantee. Lenders and FHA would then share in any future price appreciation.
No related posts.
Related posts brought to you by Yet Another Related Posts Plugin.
