CONGRESS PASSES SWEEPING HOUSING BILL; PRESIDENT WILL SIGN
Last week the Congress passed the most sweeping Housing bill of this generation and the President has stated his intent to sign the 700 page document into law as early as Tuesday. Working into the weekend, the Senate passed the final version of H.R. 3221, the Housing and Economic Recovery Act of 2008, on Saturday. Included in the bill are a number of C.A.R. supported provisions that will help to create new homeownership opportunities and begin the process of stabilizing a tumultuous market.

The bill passed the House by a vote of 272 to 152, and the Senate by a vote of 72 to 13.

Included in the bill is:
- The new loan limit for Fannie Mae and Freddie Mac, which will be the greater of either $417,000 or 115% of an area's median home price capped at $625,500.
- The new FHA loan limit, which will be the greater of $271,050 or 115% of an area's median home price capped at $625,500. Both new loan limits will be effective at the expiration of the Economic Stimulus limits on December 31, 2008.
- Federal Housing Administration (FHA) rescue program, which allows homeowners to refinance their loan with the FHA and convert it to a 30-year fixed loan. Ideally, this will help many homeowners avoid foreclosure.
- Temporary increase in mortgage revenue bonds for the purpose of refinancing subprime mortgages
- New regulator for the government sponsored enterprises (GSE). This provision will hopefully restore investors' confidence in GSE loans and help the market and economy stabilize.
- First-time home buyer tax credit: allows first-time home buyers to receive a tax refund worth up to 10 percent of a home's purchase price, but no more than $7,500. The refund serves as an interest-free loan and the homeowner is required to pay it back in equal installments over 15 years.
- Temporarily raises the VA home loan guarantee program's loan limit to the same level as the Economic Stimulus limits until the end of this year.
- Includes a FIRPTA fix so sellers will be allowed to provide the non-foreign affidavit to a qualified closing entity and not just the buyer.
- Minimum licensing requirements for mortgage originators. The minimum requirements will not apply to those only performing real estate brokerage activities unless they are compensated by a lender, mortgage broker, or other loan originator.
- 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 the year following.
 

Other provisions in the legislation include:

- The Treasury Department's proposal to assure the financial well being of Fannie Mae and Freddie Mac.
- The FHA will no longer be allowed to insure loans that utilize a seller-funded downpayment assistance program. Downpayment assistance from family, employers and other nonprofits are still allowed.
- Provides $4 billion in neighborhood revitalization funds for communities to purchase foreclosed homes.

If you have any questions, please contact Matt Roberts, C.A.R. Federal Government Affairs Manager, at matthewr@car.org.
 

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