U.S. Senate Passes Housing Stimulus Bill

U.S. Senate Passes Housing Stimulus Bill

The U.S. Senate passed a bipartisan mortgage rescue bill on Friday that allows the Federal Housing Administration to refinance troubled mortgages – even those that are under water – as long as banks agree to take a loss.

The program would allow the FHA to help as many as 400,000 homeowners.

Now the bill goes to a bipartisan committee in the House for revision. Rep. Barney Frank (D-Mass.), the Financial Services Committee chairman and a primary supporter of the bill, says the few but significant revisions House leaders seek could be made in as little as one week.

The measure includes higher limits for FHA loans and creates a new regulator for Fannie Mae and Freddie Mac. It also would provide $14.5 billion in housing tax breaks, including a credit of up to $8,000 for first-time homebuyers.

In a statement, NATIONAL ASSOCIATION OF REALTORS® President Richard F. Gaylord said the bill “is a big step toward helping people buy and keep their homes.

“We are eager for the House and Senate to come together to finalize an aggressive bill that will ensure that every American who can afford to own a home and wants to do so will have the opportunity, and that every American who responsibly owns a home is able to keep it,” Gaylord said.

NAR has expressed ongoing support for many of the provisions in the legislation, including Federal Housing Administration Modernization that will make FHA-backed mortgages more available, a tax credit for first-time homebuyers, reform of Fannie Mae and Freddie Mac, and a program to expand FHA that would allow more mortgages to be refinanced.

“The tax credit for first-time home buyers would be a strong stimulus to a weak housing market, and FHA stabilization should help thousands of families refinance existing mortgages and in many cases keep their homes,” Gaylord said.

Source: NAR, The Associated Press (07/11/08)

This is Not Your Father's FHA

NAR hears the concerns Realtors have about FHA loans - either they are either too cumbersome to process or that the higher loan limits aren't needed in their particular market.

The new reality is that FHA modernization, in addition to increased FHA loan limits, is designed to help Realtors do what they do best- put people into homes.

Consider that:

100% financing options are becoming a thing of the past, and FHA is becoming a major player for people buying a home or refinancing an existing one.


The homebuyer tax credit will attract active purchasers to the market and help stabilize housing prices.


It is projected that the FHA marketshare of new home loans will increase fivefold between 2007 and 2009.


Many Realtors are stuck thinking of the FHA of old - but FHA has streamlined its application process, and eliminated the requirement for a separate inspection. If you use a qualified FHA lender, processing an FHA loan is comparable to a conventional loan.


Even if your community is not a high cost area, raising the FHA and GSE loan limits will provide liquidity in the market and make mortgage money more available and affordable to borrowers nationwide.
This is Not Your Father's FHA. Throw in the new provision for tax credits and it is obvious that Realtor support for this bill is a no brainer. The Housing Stimulus bill being debated now includes FHA modernization.

Please call me if you are looking for FHA lenders: I know few who do fast FHA and Utah Housing loans.