American Recovery and Reinvestment Act

The American Recovery and Reinvestment Act of 2009, H.R. 1, was signed into law by President Obama on February 17, 2009. A couple of key npoints that were supported by REALTORS® and The National Association of REALTORS® were:

• 1. $8,000 first-time home buyer tax credit that would be available to first-time home buyers for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009. View a chart detailing this provision.
• 2. Commercial real estate provisions, which focus on green building and energy efficiency as well as business tax incentives. H.R. 1 provides significant funds for New Jersey energy programs, which in turn, could help support commercial property owners’ investment in energy efficiency upgrades.

This is the perfect time to buy your next home. Besides the additional tax credits (they net against your current tax liability – if you owe money, this credit reduces that amount and if you have money being returned to you, this increases the amount you have coming), home prices are at their lowest in decades, and interest rate are at a point where they cannot go anywhere but UP.

This has also reinstated the higher loan limits for Federal Housing Administration (FHA), Fannie Mae and Freddie Mac. View the newly approved loan limit estimates.  Lastly, you may want to view an outline of the Homeowner Affordability and Stability Plan, which President Obama announced on February 18, 2009 designed to help up to 7-9 million families avoid foreclosure by restructuring or refinancing their mortgages.

Tags: American Recovery and Reinvestment Act, first time home buyers, home buyers, loan limits, obama, tax credit, tax credit for buyers

Big Fee Increases Coming From Fannie Mae & Feddie Mac

I just read a news article that both Fannie Mae and Freddie Mac are planning on toughening up their credit score and downpayment rules.  As of April 1, they will implement new guidelines for loans backed by them.  The new guidelines will require buyers that are putting down less then 25% for a downpayment to be charged a penalty of 3/4 of a point (a point equals 1% of the loan amount).  It won’t matter what the buyer’s credit score is, if they are putting less then 25% down for a mortgage loan, they will be penalized 3/4 (0.75%) of a point.

Buyers of duplexes, where one unit is owner-occupied and the other is rented, will be charged a 1 percent add-on as a penalty, while those who are refinancing their homes and who plan to take cash out will be charged as much as three points if they have a low to moderate equity stake in their homes.

Many major lenders are already factoring in these higher fees, which reduces the effectiveness of the stimulus efforts.  Brad German, Freddie Mac’s spokesman,  said that the loan categories & credit risk combinations targeted by these fees “default at four to eight times” the rate of other mortgages that were backed by Freddie Mac. The reason for these fees, according to German, “We have to manage these risks appropriately,”.

So, if you are seriously planning to buy a home, this may be an ideal time to make that offer on that special home, get under contract, and settled before your mortgage loan includes these new fees and charges.  If you haven’t found that new home, yet…don’t delay!  Call us NOW at 609-417-1084 so we can help you find that special new home in record time and get you moved in.

Linda & Terry Iwaniw
REALTOR Associates
First Time Home Buyer Specialist
Marketers of HUD Owned Homes
ReSales & Investment Realty, LLC
856-795-3111 x263
609-417-1084
http://www.snewjerseyhomes.com/

Tags: buyer credit, buyers, credit, credit risk, Fannie Mae, fees, Freddie Mac, loan defaults, loan limits, mortgage loans, mortgages, points

House Rescue Bill Passes

On Wednesday, the House of Representatives passed H.R. 322, The House Rescue Bill.  It will now go to the Senate, who is expected to pass it with few or any changes and then send it ot the President for his signature.  Word out is that the President will sign this bill next week and thus making it into law effective October 1, 2008.

What affect does this new law have on the the housing market in Southern NJ?

1.  FHA loans will now require a 3.5% down payment, instead of 3%, and all seller down payment assistance programs will be prohibited. Buyers must invest at least 3.5% of the appraised value into their own home. 

2.  This law gives first-time homebuyers a refundable tax credit that works like an interest-free loan of up to $7,500 (to be paid back over 15 years) to spur home buying and stabilize the market.  The credit will begin to phase out for taxpayers with adjusted gross income in excess of $75,000 ($150,000 in the case of a joint return).

3.  It raises the Government Spronsored Enterprise (GSE) loan limits for single family homes to create affordable mortgage loans for moderately priced homes by allowing GSE loans up to 115% of the local area median home price, and to make GSE loans effective in high cost areas by raising the permanent loan limit from $417,000 to $625,500,.

4.  Raises the FHA loan limits to create affordable mortgage loans for moderately priced homes by allowing FHA loans up to 115% of the local area median home price, and to make GSE loans more available in high cost areas by raising the permanent loan limit from $362,790 to $625,500.

You can read the summary of this bill at:

Thomas – Library of Congress

Tags: downpayments, housing market, loan limits, loans, mortgages, Real Estate, real estate market