Good morning all! Just a quick update on HB645. Governor Scweitzer passed HB645 last Friday but vetoed parts of it. Most importantly for first time homebuyers....the Governor vetoed the bridge loan portion of the bill that would let first time homebuyers use their $8,000 tax credit right away.
The following is a letter from the Governor to the Secretary of State. The whole letter is not shown here but is talking about the housing portion of HB645.
"Welcome Home Loan Proqram, $2 million state special revenue (page A-3;sections 60 and 61, pages 49 and 50): While the language establishing this newprogram would lead the undiscerning reader to believe its purpose was to assist, first-time home buyers, the program actually is set up to protect financial lenders by shifting the risk of certain home loans exclusively to the State. Under this temporary, new program, lenders, such as banks, could loan money to first-time home buyers for down payments and closing costs to be pledged with federal tax credits. If home buyers failed to repay their loans by June 30, 2010, the State of Montana would be obligated to purchase those loans before August 1, 2010. The effect would be that the State would step into the shoes of the lender holding a defaulted loan obligation - not a particularly desirable position. Furthermore, the State, as a creditor, would be in a subordinate position to the mortgage lender, which would be the first lien holder. To summarize, though billed as a program to assist home buyers, the real effect of the program would be to benefit lending institutions by shifting all risk on these loans to the State. I also note that the State of Montana already has a first-time home buyer program that has been in existence since 1977, and that program is well-run and sufficiently funded."
So now we are waiting to see if FHA/HUD is going to step up and do something similar to what the State of Montana proposed. Will keep all informed.
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