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Ryan Smith
Government Affairs Director
August 1, 2008
For Immediate Release
This morning President Bush signed the "Housing and
Economic Recovery Act of 2008." For the past several
years, the California and National Association of
REALTORS® have aggressively lobbied for Congress to pass
numerous provisions found in this historic bill.
This bill is a significant move in the right direction
for
California homeowners. It will aid in stabilizing our
economy and help stem foreclosures, while also providing
support to first-time homeowners.
The legislation will assist an estimated 400,000
homeowners facing foreclosure, many of whom reside in
California, by
allowing them to refinance their current mortgages with
a Federal Housing Administration (FHA)-backed loan. The
bill also will permanently increase FHA, Fannie Mae, and
Freddie Mac loan limits in high-cost areas.
The bill permanently increases the conforming loan limit
to $625,500. In February, the Economic Stimulus Act of
2008 was signed, temporarily
raising the conforming loan limit in high-cost
areas to $729,750 from $417,000 until
December 31,
2008. Although it would have been ideal for
Congress to make permanent the current $729,750 loan
limit,
the new permanent loan limit of $625,500 is a
significant increase over previous limits. It will allow
California homeowners to refinance their loans
into safe affordable
loan products and allow first-time home buyers to enter
the market.
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.
Some other important provisions:
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A
temporary increase in mortgage revenue bonds to
refinance subprime mortgages.
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New regulator for Government Sponsored Enterprises to
restore investor confidence in
GSE loans and help
the market and economy stabilize.
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First-time home buyer tax credit, 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.
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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.
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Adjustment to the Foreign Investment in Real Property
Tax Act of 1980 (FIRPTA), allowing sellers to provide
the non-foreign affidavit to a qualified closing
entity and not just the buyer.
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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.
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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.
If you have any questions, please contact IVAR’s
Governemt Affairs Director, Ryan Smith, at
ryans@ivaor.com
Ryan Smith |
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