Home » Real Estate

2008 Housing Stimulus Bill Highlights

Sep 15, 2008
The recent Housing Stimulus Bill, also known as the Housing and Economic Recovery Act of 2008 was signed into law on July 30, 2008. Many homeowners may be confused as to what this bill means for them and how it can help. With the major downturn in the housing market, dramatic increase in foreclosures and failure of some mortgage banks, the federal government felt something needed to be done. With the passage of this bill some new options and recourses for homeowners have become available and will hopefully aid in the recovery of the housing market and prevent many homeowners from losing their properties.

Across the U.S. there are an estimated 400,000 homes in danger of foreclosure. By mid year in the month of June, Illinois held the 13th spot out of 50 states by number of residential foreclosure suits, according to data from RealtyTrac. The new housing bill will allow homeowners in distress to refinance their high rate loans to government backed low interest mortgages as long as lenders will work with a loss.

One of the main tenants of the bill that lenders would agree to basically write down loans that are in trouble to 85 percent of the appraised value. Then the homeowner who qualified would be able to get a 30 year fixed rate mortgage from FHA at 90 percent of the appraised value of the home. Anyone taking out one of these FHA loans would be obligated to split all future profit or appreciation from the home with FHA. There is a cap of $550,440 and the program starts on October 1, 2008.

Perhaps the provision that first time home buyers will notice is the Homebuyer Tax Credit. This is a $7,500 tax credit that is offered to any person who qualifies and purchases a home between the dates of April 9, 2008 and June 30, 2009. It is basically an interest free loan and can be repaid over a 15 year period. This could be especially helpful to anyone who is interested in buying Chicago new construction homes like those listed here http://www.bestchicagocondos.com/new-construction-condos/index.html and has to come up with a down payment.

Another key element of the reform is the creation of a new department to regulate mortgage companies such as Freddie Mac and Fannie Mae. It would also set the high end loan limit that would be guaranteed at $625,500. The bill would also prohibit any lender or other company or developer who stands to profit from the sale of a condo or home from financing or helping the borrower with a down payment. Many first time condo or home buyers fell victim to lenders who qualified them for loans that they were financially unable to repay. Other buyers obtained down payment financing from developers who were trying to sell out their building in order to gain construction financing. Those practices led to record numbers of borrowers who soon found themselves under the threat of foreclosure. Hopefully these new laws will help to prevent that from happening again on such a large scale at least.

The formation of the National Affordable Housing Trust Fund is another product of this legislation. This trust fund would be established to cover the cost of FHA loans that were subject to foreclosure. Later on, the funds would be earmarked to create affordable housing for those who qualify under income requirements. Also, the Low Income Housing Tax Credit program is being updated to make the process more streamlined for those applying. And along the same vein, the bill also allows for $4 billion in funds for neighborhoods to buy foreclosed properties and move forward with revitalization programs for the benefit of the community.

This is just a brief, nutshell highlight of the new legislation that passed. There are many other points and details of the bill that you can research in depth. Your accountant, lawyer or real estate agent should be able to help you, as well as employees of FHA. For those who purchased a new condo or home, which is the dream of most people, and now find themselves in financial trouble this bill could be a huge help. If you need help, don't hesitate to get the ball rolling and see if you qualify for assistance under any of the new provisions and programs. Don't let your dream of owning a condo or home turn into a nightmare.
About the Author
Paula Cherrist writes articles about Chicago real estate, Chicago condos for sale, housing-related topics and home trends.
Rating:
Please Rate:
(Average: Not rated)
Views: 137
Print Email Report Share
Article Categories
    • Artists
    • Gambling
    • Humanities
    • Humor
    • Movies
    • Music
    • Photography
    • Tattoos
    • Television
    • Classic Cars
    • Motorcycles
    • Recreational Vehicles
    • SUVs
    • Trucks
    • Vans
    • Branding
    • Business Opportunities
    • Careers and Jobs
    • Corporate
    • Customer Service
    • Direct Mail
    • Entrepreneurship
    • Ethics
    • Financing
    • Franchising
    • Home-Based Business
    • Human Resources
    • Import and Export
    • Leadership
    • Management
    • Market Research
    • Marketing and Advertising
    • Negotiation
    • Network Marketing
    • Networking
    • Organizational
    • Presentation
    • Project Management
    • Public Relations
    • Small Business
    • Strategic Planning
    • Team Building
    • Telemarketing
    • Training
    • Data Recovery
    • Databases
    • Games
    • Hardware
    • Networks
    • Operating Systems
    • Programming
    • Security
    • Software
    • Spyware and Viruses
    • Ask an Expert
    • College and University
    • Home Schooling
    • K-12
    • Languages
    • Online Education
    • Psychology
    • Accounting
    • Credit
    • Currency Trading
    • Debt Consolidation
    • Insurance
    • Investing
    • Leasing
    • Loans
    • Mortgage
    • Mutual Funds
    • Personal Finance
    • Stock Market
    • Structured Settlements
    • Taxes
    • Wealth Building
    • Coffee
    • Cooking
    • Gourmet
    • Recipes
    • Wine and Spirits
    • Acne
    • Aerobics
    • Alternative Medicine
    • Beauty
    • Cancer
    • Cosmetics
    • Depression
    • Diabetes
    • Diseases and Conditions
    • Fitness Equipment
    • Fitness
    • Hair Loss
    • Heart Disease
    • Medicine
    • Men's Health
    • Muscle Building
    • Nutrition
    • Skin Care
    • Supplements and Vitamins
    • Weight Loss
    • Women's Health
    • Yoga
    • Arts and Crafts
    • Babies
    • Collecting
    • Elderly Care
    • Genealogy
    • Hobbies
    • Parenting
    • Pets
    • Pregnancy
    • Woodworking
    • Feng Shui
    • Gardening
    • Home Appliances
    • Home Security
    • Interior Design
    • Landscaping
    • Affiliate Programs
    • Article Marketing
    • Auctions
    • Audio
    • Banner Advertising
    • Blogging
    • Broadband
    • Domain Names
    • E-Books
    • E-Commerce
    • Email Marketing
    • Ezines and Newsletters
    • Forums
    • Internet Marketing
    • Link Popularity
    • Pay-Per-Click
    • Podcasting
    • RSS
    • Search Engine Marketing
    • Search Engine Optimization
    • Security
    • Social Media
    • Spam
    • Video
    • Viral Marketing
    • Web Design
    • Web Development
    • Web Hosting
    • Copyright
    • Cyber Law
    • Intellectual Property
    • National, State, Local
    • Patents
    • Regulatory Compliance
    • Trademarks
    • Baseball
    • Basketball
    • Boating
    • Cycling
    • Extreme Sports
    • Fishing
    • Football
    • Golf
    • Hockey
    • Hunting
    • Martial Arts
    • Running
    • Scuba Diving
    • Soccer
    • Swimming
    • Tennis
    • Dating
    • Divorce
    • Marriage
    • Weddings
    • Astrology
    • Buddhism
    • Christianity
    • Faith
    • Hinduism
    • Islam
    • Judaism
    • Meditation
    • Metaphysical
    • New Age
    • Cable and Satellite TV
    • Cell Phones
    • Communication
    • Gadgets and Gizmos
    • GPS
    • Satellite Radio
    • Video Conferencing
    • VoIP
    • Addictions
    • Coaching
    • Goal Setting
    • Motivational
    • Stress Management
    • Time Management
    • Clothing
    • Electronics
    • Fashion
    • Gifts
    • Jewelry
    • Causes and Organizations
    • Environment
    • History
    • Holidays
    • Men's Issues
    • Nature
    • Philosophy
    • Politics
    • Women's Issues
    • World Affairs
    • Air Travel
    • Camping
    • Cruises
    • Destinations
    • Outdoors
    • Article Writing
    • Book Reviews
    • Copywriting
    • Fiction
    • Non-Fiction
    • Poetry
    • Quotes
    • Screenplay
    • Tools and Resources