On Wednesday morning, President Bush signed into law what has been deemed as the most significant housing-related legislation we've seen in more than a generation. Sounds big, and let me tell you -- it is. In fact, the 600+page bill was short only on brevity.
Here are a few highlights that will likely affect consumers most directly, compiled from press releases by the National Association of Realtors (http://www.realtor.org) and the Mortgage Bankers Association (http://www.mbaa.org).
Hey, did I mention the bill was over 600 pages?
Highlights:
FHA to the (Foreclosure) Rescue! FHA would insurance borrowers with problematic subprime loans. Borrowers would share future appreciation with FHA but they get a 30year fixed FHA loan and get to keep their house! May be a good alternative to foreclosure.
FHA: Permanent increase of the FHA loan limit. My estimation is $522K for the Seattle/Bellevue/Everett MSA -- that is not confirmed but if I'm right I get to say 'I told you so.' Would become effective January 1st, 2009.
The minimum down payment requirement for FHA is bumped up .5% to 3.5% but it is not clear to me when this would become effective (hopefully not retroactive 10 years ago when I bought me first home on an FHA loan).
FHA Seller-funded down payment assistance (often referred to as Nehemiah, one of the 3rd party facilitators) would be prohibited, effective October 1st 2008. That is already being contested but HUD has been after this program for years, so stay tuned on that one, may be too close to call.
Fannie Mae/Freddie Mac loan increases to the same level as FHA, effective Januray 1st.
VA loan limit temporarily increased to $567,500 for our area, through the end of this year.
Tax incentive -- this one is interesting: a $7,500 re-payable credit for those who qualify on home purchases between April 8th, 2008 and June 30th, 2009. If you qualify and take the credit, you would pay it back over the next 15 years. For those of you who don't have a calculator handy, %7,500 divided by 15 equals $500. No, I didn't perform that calculation in my head. Although if they had made it repayable over 10 years I would've been all over that one.
There is much more to it of course (Fannie Mae/Freddie Mac reform and oversight, Truth in Lending Act additional disclosures, Loan Officer Licensing to name just a few and I really mean just a few), but those were the highlights that caught me eye.
So how does this all apply to you? Depends on whether you're buying a home. If you are (and you should be), chat with your Loan Officer (which should of course be me) about any potential impact on your loan scenario.
As always, my comments are purely my opinion and shold in no way be taken as fact or the opinion of others. Thanks for reading!
James Wirth is a Senior Loan Originator licensed by the Washington State Department of Financial Institutions under Loan Officer License Number 510-LO-34536. His Blog can be found at http://mymortgageplan.blogspot.com and he can be reached directly at:
James Wirth
Landover Mortgage
Cell/Direct: (425) 501-4749
Office: (425) 977-2244 Ext. 1002
Fax: (866) 215-1749
Email: Jameswirth@landovermortgage.com
Web: http://www.landovermortgage.com/jameswirth/
Wednesday, July 30, 2008
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