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HR 3221: the American Housing Rescue and Foreclosure Prevention Act of 2008 provides a great benefit for First-Time Home Buyers.

By
Real Estate Agent with Berkshire Hathaway HomeServices California Properties DRE# 01788371

On July 11, 2008 the Senate voted 84 to 12 in favor of this legislation.  A large part of the bill is known as "FHA Modernization", and it includes many provisions.

This bill will help most buyers, but it will especially help first-time home buyers.

Perhaps the most important part of this legislation is the $8,000 tax credit for first-time buyers

Such a tax credit would be a huge incentive for people to buy their first home, and will greatly increase the sales of homes across the nation.  When this act takes effect, we should expect to start seeing many multiple bid offers on homes, which in turn, may begin to drive prices upward.  At that point, we may very well see our currrent "buyers' market" turn into a "sellers' market".

Other important parts of the bill include

  • Increasing the FHA loan limits to 110 percent of the local median home price (not to exceed $625,000)
  • Setting the down payment requirement at 3.5 percent
  • Prohibiting seller-funded down payment assistance (both direct or through a third party)

Current Status:  The bill has been passed by the Senate.  Now the House of Representatives is rewriting the bill, and is expected to send it back to the Senate for final approval within the next week.  Once the bill is in its final version, Congress should pass it and send it on to the President for final approval. 

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