Today the President signed into law HR 3221 otherwise known as "Housing and Economic Recovery Act of 2008".  This legislation has gotten a lot of press coverage and interest.  There are thousands of articles being written about it on the Internet.  I have people asking me, "Is this going to help the real estate market?"  My answer is it's a little to early to tell, but there are definitely some positives in this legislation.

Here are the key highlights of the legislation:

  • Reform for Freddie Mac and Fannie Mae in the form of more oversight and permanent caps on loan limits for conventional loans.
  • FHA Reform.  FHA loans have become the loan of choice in our market as they currently only require 3% down.  Changes that we are expecting to take place are loan limit changes, increase in down payment to 3.5% and modernization or streamlining of the FHA loan process.
  • Homebuyer Tax Credit - a $7,500 tax credit that would be available for qualified purchases between April 8,2008 and June 30,2009.  The credit is repayable over 15 years, effectively making it an interest free loan.
  • FHA Foreclosure Rescue - The is a refinance program that is supposed to help homeowners avoid foreclosure.  It involves the mortgage holder agreeing to writing down the homeowner's loan so that they can refinance into  an FHA 30 year fixed rate.  The homeowner would have to share 50% of any future appreciation with FHA.
  • Seller Funded Down Payment Assistance Programs - These programs will be prohibited by FHA beginning October 1, 2008.  Commonly known as Nehemiah or Ameridream.  This does not affect assistance programs such as Nevada Housing or Nevada Rural Housing Bond Programs.
  • VA Loan Limits - Temporarily increases in the VA home loan guarantee limits.

These are just a few of the provisions of this new legislation.  Over the next couple months we will get more details on how this is going to affect loan programs etc.  If you have specific questions please contact me and I can help you with those.