The Housing Stimulus Bill (The Housing and Economic Recovery Act of 2008) recently signed by President Bush, is expected to alleviate some of the turmoil surrounding the foreclosures bombarding the current real estate market in many areas around the nation. The Housing Stimulus Bill entails many provisions and I will include only a few of them here.
- Increased loan limits for FHA and Jumbo loans up to $625,500
- Available tax credit up to $7,500 for first time home buyers who purchase a home between April 2008 and July 2009. This tax credit is paid back over a 15-year period and acts as an interest free loan. Buyers do not qualify if their adjusted gross income is more than $75,000 ($150,000 for those filing jointly).
- FHA downpayment to increase from 3% to 3.5%
- Nonprofit down payment assistance programs (i.e. Nehemiah and AmeriDream) will be disappearing soon
- Troubled homeowners who are facing foreclosure can refinance and insure their loans (with their lender’s permission of course) through FHA in order to avoid foreclosure. It is expected 400,000 homeowners will take advantage of this option and refinance their existing loans; although, not all homeowners qualify.
- Areas of the nation hit hardest by foreclosures will be provided with emergency assistance ($4 billion) to rehabilitate and stabilize affected neighborhoods.
More information regarding the Housing Stimulus Bill: