New Bill Passed!

President Bush signed the Housing and Economic Recovery Act of 2008 today, a bill that will assist an estimated 400,000 homeowners facing foreclosure by allowing them to refinance their current mortgages with a Federal Housing Administration-backed loan. The bill also permanently increases the conforming loan limit to as high as $625,500.

“One of the biggest reasons we’ve seen a slowdown in home sales is because buyers are having difficulty obtaining mortgage funds. That’s why this bill is significant: It increases the access to affordable, stable mortgages,” said Chris Sloan, president-elect of the Utah Association of REALTORS®.

The new loan limits for Fannie Mae and Freddie Mac are the greater of either $417,000 or 115 percent of an area’s median home price, up to $625,500. The new FHA loan limit will be the greater of $271,050 or 115 percent of an area’s median home price, up to $625,500. Both new loan limits will be effective at the expiration of the economic stimulus limits on December 31, 2008.

Another part of the bill includes a temporary tax credit for first-time home buyers of up to $7,500 for those who purchase between April 9, 2008, and July 1, 2009. This credit is available to anyone buying their first house or anyone who has not owned in three years. Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full credit. A home is eligible for the credit if it is any residence that will be used as a primary residence (single-family, townhouse, condo, etc.)

For more detailed information about the bill and the tax credit, visit www.Realtor.org. Another Web site, www.federalhousingtaxcredit.com, also provides information about the tax credit.