Housing Bill….Housing Debacle?

The Housing Bill passed both houses of congress with flying colors and now it seems that a threatened veto by the president has been reconsidered and he will sign the bill after all. So is the housing bill good or bad for America?

Let’s take a look at some of the finer points in the legislation.

· $7,500 Tax Credit – Yes that’s right, for those of us who buy a foreclosed home as a first time homebuyer, there is a tax credit. But wait, not so fast, the credit has to be paid back….

What, paid back? How is that a credit then? Sounds like Mr. Reed and Ms. Pelosi pulled a fast one. If you take the credit, you’ll have to pay it back in equal installments over the next 15 years.

· Increase in Conforming Loan Limits for Fannie Mae – Under the current system, home loans greater than 417,000 are considered to Jumbo Loans. Under this provision the new conforming limit will be $625,500.

This is good news for those of you were forced to take a Jumbo loan when you bought or refinanced your home in the past. If you have a loan amount between $417,001 and $625,500 it is time to investigate whether a lower rate is available! Call Today!

· FHA Revamped and Modernized – The good news is that FHA will be revamped and modernized and will act as America’s major subprime player in the mortgage market. The bad news is that the bill takes away down payment assistance.

If you are in trouble and on the verge of foreclosure, FHA may be the answer. Refinancing with an FHA loan is exactly what this new program is for.

However, if you are one of the more than 250,000 citizens each year that depend on down payment assistance in conjunction with an FHA loan, the Democrat controlled congress (you know, the ones who are ‘for’ the little people) just kicked you to the curb.

And, if you are a real estate investor, this means that your flip strategies with homes in the first time homebuyer market may be at risk. There are resources available to help you sell your homes using down payment assistance but they will now be very specialized sources and may require buyers to take certain home ownership courses to qualify. (for information on these sources visit dividendamerica.com and schedule a consultation)

The bill is a mix of good and bad, give and take. To be fair, this bill is more about giving stock market investors confidence in the mortgage market than about helping the everyday citizen.

As with all things government does, this legislation is a huge compromise that could have been better but is a step in the right direction.

For more information read the article on MarketWatch.com: http://www.marketwatch.com/news/story/fine-print-housing-bill-mutes/story.aspx?guid=8AA21F55-D848-4076-B9EF-282FEAD95B1D&print=true&dist=printMidSection

Michael Gross is the President of Dividend America Mortgage and has been in real estate for over 20 years. He has been a builder, a Realtor, an appraiser, and currently he is a lender and an active real estate investor. He uses all of his experience and knowledge to show individuals how to properly use a mortgage as a tool to help create greater wealth through real estate investing. For more information on residential and small commercial loans please contact Mr. Gross on his direct line at 770-350-7373 or via email at mgross@dividendamerica.com