President signs the Housing and Economic Recovery Act of 2008!

You may have heard about this new bill and the speculation around if the President would sign it or not. Well this morning ... it is official!

In a future post I will break down each of these items to give you further details. For now here are some of the provisions fo the bill:

• Permanently increases the conforming loan limit to $625,500. The new loan limits for Fannie Mae and Freddie Mac are the greater of either $417,000 or 115 percent of an area's median home price, up to $625,500. The new FHA loan limit will be the greater of $271,050 or 115 percent of an area's median home price, up to $625,500. Both new loan limits will be effective at the expiration of the economic stimulus limits on December 31, 2008.
  
• New regulator for Government Sponsored Enterprises (Fannie and Freddie) to restore investor confidence in GSE loans and help the market and economy stabilize.
  
• First-time home buyer tax credit (aka interest free loan), which allows first-time home buyers to receive a tax refund worth up to 10 percent of a home's purchase price, up to a maximum of $7,500. The refund serves as an interest-free loan and the homeowner is required to repay it in equal installments over 15 years.
  
• Temporary raise in the loan limit for the Veterans Affairs home loan guarantee program to the same level as the economic stimulus limits until the end of 2008.
  
• The setting of minimum requirements for mortgage originators, which mandates fingerprinting of loan originators and establishes a nationwide loan originator licensing and registration system. The requirements do not apply to those only performing real estate brokerage activities unless they are compensated by a lender, mortgage broker, or other loan originator. States will have the ability to implement more stringent laws.
  
• The creation of a National Affordable Housing Trust Fund to help cover the cost of the FHA rescue plan for the first five years and develop affordable housing in subsequent years.
  
• The Treasury Department's proposal to create a federal backstop program to insure the financial well-being of Fannie Mae and Freddie Mac.
  
• The FHA's inability to insure loans that utilize a seller-funded down-payment assistance program (aka the eliniation of down payment assistance programs). Down-payment assistance from family, employers and other nonprofits is still allowed.
  
• The Community Development Block Grant Programs' $4 billion allotment for communities to purchase and refurbish foreclosed homes.

As I mentioned before here is just an overview so you know what the big picture is. I will break is down for you in detail in a separate post!

This Blog by:

Team Newington
Sacramento Mortgage Planners
(916) 687-6868
www.SuperiorLoanteam.com