What it means to homebuyers
The Housing & Economic Recovery Act of 2008 introduced changes in the mortgage industry that affected the housing market. Below is a brief summary of the legislation & what it means for homebuyers.
Purpose of the legislation:
- Make it easier to buy or sell a home
- Slow down the rate of foreclosures
- Ensure the financial stability of Fannie Mae & Freddie Mac
- Higher permanent loan limits for conventional, FHA, & VA Loans
- Tax credit for first-time homebuyers – up to $7500 in the purchase year, for homes purchased between April 9, 2008 and July 1, 2009
- Modernization of FHA Loan Programs – including a 3.5% minimum down payment
- Fannie Mae & Freddie Mac get a financial boost from the U.S. Treasury, & they will have a new regulator with broader authority
- FHA “HOPE” Rescue Plan – refinancing for homeowners at risk of foreclosure
What this means to homebuyers:
The higher loan limits could help buyers obtain more affordable financing; however, the effects will vary by geographical location – so ask your local Mortgage Adviser for details. Since the new permanent limits are less aggressive than the “conforming plus” limits that expired on December 31, 2008, buyers must act soon to take advantage of current higher limits.
The initial cash savings from the tax credit may be very atractive to many first-time homebuyers; however, buyers must act soon to take advantage of the tax credit by closing on a new home before July 1, 2009.
Help for Fannie Mae & Freddie Mac makes it easier to buy or sell a home by boosting investor & consumer confidence in the housing market. THe FHA “HOPE” Rescue Program may help some homeowners avoid foreclosure, potentially reducing the inventory of homes entering the market. This is good news for everyone.
Contact your Coldwell Banker REALTOR to learn more.