Blue Oak Blog

July 24th, 2008 2:23 PM

American Housing Rescue and Foreclosure Prevention Act (H.R. 3221)

This bill was passed by the Senate and yesterday, it was passed by the house. President Bush said he will reluctantly sign it. The bill does a few things that will impact our industry rather quickly.

An amendment was added to the bill in the house that prohibits Nehemiah type purchase assistance. This was a process where the seller would gift money to a third party that would then gift the money, less a handling fee, to the buyer for down payment assistance.

Some, but not all, of the other things this bill does is:

  • Establishes the Federal Housing Finance Agency to oversee Fannie Mae and Freddie Mac.
  • Gets rid of the Federal Housing Finance Board and puts those responsibilities on the hands of the new Federal Housing Finance Agency.
  • Gets rid of the Office of Federal Housing Enterprise Oversight (OFHEO) and puts those responsibilities ion the hands of the new Federal Housing Finance Agency.
  • Increases the FHA loan limits to 155% of the area’s median home price up to $625,000 a/o 12/31/2008.
  • Sets up housing trust funds for low income families with monies from Fannie Mae and Freddie Mac.
  • Sets up grants for community development or housing non-profits.
  • Sets up grants for homebuyer education.
  • Raises the minimum asset level for Community Financial Institution Members from $500 Million to $1 billion.
  • Establishes Hope for Homeowners Program (HOPE) which sets $300 billion aside for homeowners to re-finance to fixed rate loans. The homeowner must be the primary resident, must have greater than 31% debt to income, and the lender must lower the principle owned.
  • Establishes mandatory licensing requirements for mortgage loan originators.
  • Adds manufactured homes for low and moderate income families to Fannie Mae and Freddie Mac.
  • Sets up foreclosure counseling and extends the time period to 9 months for foreclosure processing when a returning veteran is involved.
  • Sets aside $4 billion for communities to purchase foreclosures to avoid blight.
  • Expands the disclosure requirements for mortgages.
  • Gives up to $7500 to first time home buyers. Lots of restrictions and must be repaid over 15 years.
  • Give a property tax deduction to non- itemizers of up to $500 ($1,000 for married couples)
  • Provides $11 billion in tax exempt bonds for new loans and refinances.

Posted by Michael Voors, SRA, CRP on July 24th, 2008 2:23 PMPost a Comment (0)

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