• Creates a $7,500 tax credit for some first-time homebuyers for any qualified purchase between April 9, 2008 and June 30,     2009.  The credit begins to phase out for taxpayers with adjusted gross incomes in excess of $75,000 ($150,000 in the case of a joint return) and must be repaid over 15 years or upon sale of the home, whichever comes first.  Because of the repayment condition, this credit is essentially an interest free loan.
  
  
• After the current temporary increases in the conforming loan limits expire at the end of this year, conforming loan limits will be the greater of $417,000 or 115% local area median home price, capped at $625,500, and will be permanent limits starting January     1, 2009.

• After the current temporary FHA limits expire at the end of this year, the new permanent limit will be the greater of $271,050 or 115% of local area median home price, capped at $625,500.  But FHA down payment requirements will go up to 3.5% (from 3%).

• Prohibits the use of down payment assistance programs funded by those who have a financial interest in the sale (not assistance programs provided by nonprofits funded by other sources, churches, employers, or family members). This prohibition does not go into effect until October 1, 2008.
  
  
• Temporarily increases the VA home loan guarantee loan limits to the same level as the Economic Stimulus limits through December 31, 2008.

The Act includes various other provisions including those dealing with Fannie and Freddie, mortgage insurance, bonds and funding for neighborhoods to clean up blight because of foreclosures.

This summary is not tax or legal advice and is intended only to highlight some provisions of the Housing and Economic Recovery Act of 2008.  The various provisions described above may not apply to all individuals due to various restrictions and limitations in the law.  We encourage all of our clients to conduct their own research on the Act and consult with their tax and/or financial professionals to determine how this new law will impact them. 

As always, feel free to contact me with questions.