Washington has heard the message! The Housing and Economic Recovery Act of 2008 was signed into law by the president this morning. Many homeowners will soon have access to more affordable financing, and first-time homebuyers (those who have not owned a home for three years) will receive a tax-credit to help them enter the market.
Up to 400,000 at-risk borrowers will be able to refinance their old high-cost mortgages for new low-cost mortgages at fixed-rates insured by the Federal Housing Administration.
This bill is not intended or crafted to allow irresponsible borrowers to escape foreclosure by refinancing their homes and then turning around to sell them. Lenders will be asking borrowers to qualify for these funds and the borrower will have to have a verifiable hardship such as illness, loss of job, divorce, etc. The following are some of the criteria to be eligible:
- Must be your primary residence
- Must have received a loan between January 2005 and June 2007
- Debt ratio cannot be less than 40%
- May or may not be current on mortgage (should not be more than 90 days late)
- Must retire all debt including lines of credit
- Cannot take a new HELOC for 5 years
I am including a link to an article that was e-mailed to me by realtor.org on 7/30/08 and seems to really hit the highlights of the bill!
http://www.realtor.org/gapublic.nsf/pages/hr_3221_key_provisions?OpenDocument
One big change current buyers should be aware of is that buyers can now get a 100% loan via down payment assistance that is seller funded. After 10/01/08, seller funded down payment assistance programs will no longer be available. In addition FHA down payment will go up from 2.75 to 3.5%. So, if you are looking to buy with 0 down, make sure that you have your loan closed before October 1, 2008.
The bill has many other features for buyers and/or would-be sellers.
For more information on Seller Funded Down payment Assistance or any other questions please don’t hesitate to contact me, if I don’t have the answers I can certainly help to point you in the right direction!
For more information about the bill, visit http://www.realtor.org/governmentaffairs.