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Monday, August 18, 2008

New Mortgage Law Has Buyers Scrambling

Housing industry observers expect that prospective buyers will scramble to take advantage of seller-funded down-payment assistance before a federal ban on such programs takes effect on Oct. 1.

The federal housing bill signed into law in July sews up a loophole that allows nonprofit organizations to gift mortgage down payments, and industry experts believe markets that have relied heavily on the programs could see new-home sales cut by as much as half.

Seller-funded downpayment assistance has served as a surrogate for subprime loans in some ways and has helped builders put first-time and low-income buyers into new homes.

"We will eventually go back to the mind-set of a society where you have to have 3 percent up-front to buy a home," says Phoenix real estate analyst Jim Belfiore.

Source: Poughkeepsie Journal (N.Y.) (08/18/08)

Monday, August 4, 2008

Housing Rescue Bill

President George W. Bush signed into law a bipartisan housing stimulus bill Wednesday that is expected to bring greater stability to housing markets nationwide.

The bill, strongly supported by the NATIONAL ASSOCIATION OF REALTORS®, will help some 400,000 home owners refinance into affordable, government backed loans and offer a temporary first-time home buyer tax credit, which is expected to serve as an attractive incentive to buyers and help reduce high inventories of unsold homes.
The temporary first-time home buyer tax credit would offer $7,500 for the purchase of any home and an be used for purchases between April 9, 2008, and July 1, 2009.

The bill — H.R. 3221, the Housing and Economic Recovery Act of 2008 — also includes reform of Fannie Mae and Freddie Mac, FHA modernization, and permanent increases in conforming and FHA loan limits.

"These are all designed to help the housing and mortgage industries and boost the U.S. economy," NAR President Dick Gaylord said in a statement. “NAR has been a leading advocate for many of these changes long before the current housing and economic downturn. We are pleased that the president and Congress worked together to enact meaningful legislation that protects and enables families in this country to continue to strive for and enjoy the dream of homeownership.”

Source: NAR, Associated Press (7/30/08)