Senate passes landmark housing bill
A new housing bill with controversial measures to help borrowers , housing market and Fannie and Freddie.
Senate has passed a landmark housing bill which will help the homeowners and the mortgage giants Fannie Mae and Freddie Mac. The bill will offer $300 billion for troubled homeowners. It will also help in establishing a rescue plan for Fannie Mae and Freddie Mac. President Bush was against it but he has agreed to sign it.
This is an effort by Washington to save the nation from the housing chaos. This is one of the legislation in decades that will have far reaching effect in the US housing sector. According to most of the people associated with the bill, it will not perform a miracle but will act as a step towards economic recovery. The senators and other officials engaged in it want it to be implemented quickly to save the housing market from further downfall.
The bill was passed 72 to 13, but still many senators and the White House has objections to some part of it.
The bill will serve two objectives-
- To offer government-backed mortgage to homeowners who may undergo foreclosure
- Recover Fannie and Freddie with a temporary rescue plan
Some of the main points of this 700-page bill which will have direct impact on consumers and communities -
Federal Housing Administration’s (FHA) will be able to insure up to $300 billion in new 30-year fixed-rate mortgages. This is available for at-risk borrowers in owner-occupied homes.
A stronger regulator for the government sponsered enterprises (GSEs) will be established.
“Conforming loan” limits will be increased to$625,500 from $417,000.
For high-cost areas, the FHA maximum loan limits will be increased to $625,500.
Now as a new home buyer, you can get a tax refund worth up to 10% of a home’s purchase price (or less than $7,500).
For FHA loans, now you will have to provide 3.5% instead of 3% down payment.
