House Passes Stimulus Package

The House of Representatives passed the Housing Stimulus Package.  What happens next? The Senate will need to confirm it, which is expected to happen; the President will need to sign it into law, which is also expected to happen. 

What does this all mean?

Here is a great list from an article in the Wall Street Journal:

Key points of the housing bill, and their cost over 10 years (to be fully offset by tax code changes and fees):

• Fund to provide more low-income housing: $5.3 billion

• Tax credits for first-time home buyers: $4.6 billion

• Grants for state and local governments to buy foreclosed homes: $3.9 billion

• FHA insurance for up to $300 billion of home loans: $729 million

• Counseling for homeowners facing foreclosure: $210 million

• Loosens restrictions on how states issue tax-exempt housing bonds

• Keeps lenders from foreclosing or increasing mortgage interest on returning troops for a year. Creates financial-counseling program, increases home-loan limit for military veterans: $112 million

• Raises loan limit for lenders to 115% of the local area median home price, up to $625,000

• Raises limit on seniors' reverse-mortgage program to $625,000

• Raises limit on federal debt to $10.6 trillion, from $9.8 trillion

• New regulator for Fannie and Freddie, financed by the two lenders

The bill also authorizes the Treasury secretary to expand credit and buy equity shares in Fannie or Freddie if necessary. The Congressional Budget Office estimates this would cost an extra $25 billion if it happened.

 Read the whole article here.

 For first time buyers this will also mean a $7,500 tax credit.  The buyer would have to repay this amount over a 15 year period. 

 What are your thoughts on this Bill?  Will it help the housing market?

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