What the Housing and Economic Recovery Act is all about.
All things aside, here is the entire 700 page document, download if you want and read it if you have sleep insomnia. For a shorter version, here is a four page summary. The bill was signed into law last week by President Bush last week. Just when everything looked like everything was sorted out, the Government had to go stickin it’s head into everything.
A breakdown of some major changes
No more seller funded down payment assistance programs like Nehmiah, Ameridream and more. Starts on October 1st, 2008. If you still think you can get zero down, better hurry.
The required minimum down payment will move from 3% to 3.5%
$10 billion for mortgage revenue bonds to restructure loans that are causing homeowners to go into foreclosure. Just more throwing good money after bad.
Tax credit for first time homebuyers of $7500. Oh but wait you have to pay it back over a period of 15 years. Also the credit is only available on qualified homes bought between April 8, 2008 and June 30, 2009.
Loan Originator requirements
Down payment assistance programs are going to be one of the biggest things that below are going to notice. Homeowners that used down payment assistance programs are 3 times as more likely to default on their home loans. There are foreclosures that are dotting every neighborhood.
Gone are the times when people can walk into a home, people that want to own a home are going to have to save up for a down payment. Feel proud that you saved for your first home.
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