| The recent Housing Stimulus Bill, also known as the | | | | such as Freddie Mac and Fannie Mae. It would also set |
| Housing and Economic Recovery Act of 2008 was | | | | the high end loan limit that would be guaranteed at |
| signed into law on July 30, 2008. Many homeowners | | | | $625,500. The bill would also prohibit any lender or |
| may be confused as to what this bill means for them | | | | other company or developer who stands to profit |
| and how it can help. With the major downturn in the | | | | from the sale of a condo or home from financing or |
| housing market, dramatic increase in foreclosures and | | | | helping the borrower with a down payment. Many first |
| failure of some mortgage banks, the federal | | | | time condo or home buyers fell victim to lenders who |
| government felt something needed to be done. With | | | | qualified them for loans that they were financially |
| the passage of this bill some new options and | | | | unable to repay. Other buyers obtained down payment |
| recourses for homeowners have become available | | | | financing from developers who were trying to sell out |
| and will hopefully aid in the recovery of the housing | | | | their building in order to gain construction financing. |
| market and prevent many homeowners from losing | | | | Those practices led to record numbers of borrowers |
| their properties. | | | | who soon found themselves under the threat of |
| Across the U.S. there are an estimated 400,000 | | | | foreclosure. Hopefully these new laws will help to |
| homes in danger of foreclosure. By mid year in the | | | | prevent that from happening again on such a large |
| month of June, Illinois held the 13th spot out of 50 | | | | scale at least. |
| states by number of residential foreclosure suits, | | | | The formation of the National Affordable Housing |
| according to data from RealtyTrac. The new housing | | | | Trust Fund is another product of this legislation. This |
| bill will allow homeowners in distress to refinance their | | | | trust fund would be established to cover the cost of |
| high rate loans to government backed low interest | | | | FHA loans that were subject to foreclosure. Later on, |
| mortgages as long as lenders will work with a loss. | | | | the funds would be earmarked to create affordable |
| One of the main tenants of the bill that lenders would | | | | housing for those who qualify under income |
| agree to basically write down loans that are in trouble | | | | requirements. Also, the Low Income Housing Tax |
| to 85 percent of the appraised value. Then the | | | | Credit program is being updated to make the process |
| homeowner who qualified would be able to get a 30 | | | | more streamlined for those applying. And along the |
| year fixed rate mortgage from FHA at 90 percent of | | | | same vein, the bill also allows for $4 billion in funds for |
| the appraised value of the home. Anyone taking out | | | | neighborhoods to buy foreclosed properties and move |
| one of these FHA loans would be obligated to split all | | | | forward with revitalization programs for the benefit of |
| future profit or appreciation from the home with FHA. | | | | the community. |
| There is a cap of $550,440 and the program starts on | | | | This is just a brief, nutshell highlight of the new |
| October 1, 2008. | | | | legislation that passed. There are many other points |
| Perhaps the provision that first time home buyers will | | | | and details of the bill that you can research in depth. |
| notice is the Homebuyer Tax Credit. This is a $7,500 | | | | Your accountant, lawyer or real estate agent should |
| tax credit that is offered to any person who qualifies | | | | be able to help you, as well as employees of FHA. For |
| and purchases a home between the dates of April 9, | | | | those who purchased a new condo or home, which is |
| 2008 and June 30, 2009. It is basically an interest free | | | | the dream of most people, and now find themselves in |
| loan and can be repaid over a 15 year period. This | | | | financial trouble this bill could be a huge help. If you |
| could be especially helpful to anyone who is interested | | | | need help, don't hesitate to get the ball rolling and see if |
| in buying Chicago new construction homes like those | | | | you qualify for assistance under any of the new |
| listed here and has to come up with a down payment. | | | | provisions and programs. Don't let your dream of |
| Another key element of the reform is the creation of | | | | owning a condo or home turn into a nightmare. |
| a new department to regulate mortgage companies | | | | |