The Housing and Economic Recovery Act of 2008 was signed into law on July 30, 2008. The following summary highlights just a few of the bill's many important provisions:
Permanently increases conforming loan limits up to the greater of $417,000 or 115% local area median home price, capped at $625,500. Loan limits will not go into effect until December 31, 2008. In Reno the loan limits will remain at $417,000. Loan limits will not go into effect until December 31, 2008.
Increases down payment requirement on FHA loans to 3.5%. Creates a new $7500 tax credit (repayable over 15 years) is available to first-time home buyers for any qualified purchase between April 8, 2008 and June 30, 2009. A first-time home buyer is defined as someone who has not owned a home for the last three years.
Creates a refinance program that allows lenders to write down qualified mortgages to 85% of the current appraised value and qualified borrowers would get a new FHA 30-year fixed mortgage at 90% of appraised value. Loan limit is $550,440 and is effective on October 1, 2008. Important note: Borrowers have to share with FHA a minimum of 50% of all future appreciation.
Prohibits the use of down payment assistance programs funded by those who have a financial interest in the sale beginning October 1, 2008. Non-profit assistance programs funded by churches, employers, or family members are not prohibited.
Puts risk-based pricing on FHA on hold for one year, beginning October 1, 2008 through September 30, 2009.
Lifts FHA cap on reverse mortgages, allowing the FHA to insure reverse mortgages for as much as the full value of a home.
Strengthens the existing mortgage originator licensing and registration system.
H.R.3221 (full text)
NAR Summary and Resources
Jason Norris, MBA, CMPS, President MFG Mortgage Services, LLC 1.775.322.0496
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