Home : Blogs : Gerry Suarez Jr- Your FHA Loan Pro! : Your HUD Loan Pro! FHA Loans, VA Loans, USDA Rural Development and Down Payment Assistance Info for Florida

Part 2- Economic Stimulus Package can be law by as early as next week. What does it mean for us?

It's Friday the 13^th and Jason is walking the hallowed halls of Congress making laws I personally hope we don't come to regret. We have all heard many conflicting reports on this legislation but sketchy details have been confirmed. What does it all mean to us and our industry?

As of this time the bill and much of the supporting documentation is available at the following link:

http://www.conferencereport.gpoaccess.gov/DefaultN.aspx?AspxAutoDetectCookieSupport=1

It proposes keeping the existing first time buyers tax credit program intact with the following changes:

10% to $8k credit max
waives the repayment provision on homes purchased after 12/31/08 (it is retroactive!)
extends the date to homes purchased on or before 11/30/09
still allows for recapture of the credit within 36 months if the home is sold or ceases to be a primary residence
still applies to first time buyers only

Regarding some other provisions that affect us:

•· The USDA Guaranteed Rural Housing funding levels remained at the $10.472 billion level.

•· FHA loan limit increases are back on the bill. Basically makes 2008 levels the current levels for the rest of 2009. The devil is in the details here, but that will require another post on its own. FNMA and Freddie loan limits are affected similarly as well

•· There is $1.5 billion allocated to a "Homelessness Prevention Fund" so look for more on that.

I did not see any of the provisions regarding changes to the H4H program or mortgage loan modification programs.

We now know both houses are scheduled to vote today in an effort to get this bill to the President's desk before his President's Day deadline. Personally I believe that artificial timeframe is resulting in a bill rife with waste. Please take the time to read through some of it yourself at the link above and don't rely on the press to inform you.

Refer back to part 1 of this post for an interesting look at how the details of legislation such as this can make such a difference. The comments included a breakdown of how the Senate version was originally supposed to work and although the amount was higher may not have made as much of a difference.

Gerry Suarez, Jr.

Your FHA Loan Pro!

Posted by Gerry Suarez Jr- Your FHA Loan Pro! on 02/13/2009 12:13 PM

Comments (9)

Politics in the ActiveRain Channel

economic stimulus, first time homebuyers, down payment assistance, fha loans, usda, rural development loans, tax credits

Post is included in group: USDA Rural Development Loan Group
Post is included in group: Realtors®
Post is included in group: Politics And Real Estate
Post is included in group: Mortgages
Post is included in group: 1st Time Buyers

9 Comments on Part 2- Economic Stimulus Package can be law by as early as next week. What does it mean for us?

FEB

It's about time I walk through those halls:)

Once again, thanks for information my friend. I'm going to try to digest this more over the weekend. Whatever happens, I only wish the best for the people and this nation.

Sardi,

You don't know how much more comfortable I'd be knowing you had a hand in this all this. You are a good man with intelligence and conscience, three attributes I fear are in short supply on the hill.

Thanks for the comment bro.

Gerry Suarez, Jr.

Your FHA Loan Pro!

What a waste of a bill. They are handing out band-aids, but not fixing the wound.

FEB

Mike- I very much agree and will go one step further. They are infecting the wound with high inflation before bandaging it up. Not trying to be self serving at all, but there is simply not enough effort being made to fix the housing mess. Thanks for your comment.

Gerry Suarez, Jr.

Your FHA Loan Pro!

FEB

Gerry,

Do you have any more specifics on the FHA loan limit increase being back in the bill? I've read that it was dropped from the bill at the last minute? regardlkess when do the new guidelines take effect - I've herd March 4th?

Best Chris

Chris- I'm posting the verbiage that made the bill below if you are brave enough to interpret:

Sec. 1202. FHA Loan Limits for 2009. (a) LOAN LIMIT FLOOR BASED ON 2008 LEVELS- For mortgages for which the mortgagee issues credit approval for the borrower during calendar year 2009, if the dollar amount limitation on the principal obligation of a mortgage determined under section 203(b)(2) of the National Housing Act (12 U.S.C. 1709(b)(2)) for any size residence for any area is less than such dollar amount limitation that was in effect for such size residence for such area for 2008 pursuant to section 202 of the Economic Stimulus Act of 2008 (Public Law 110-185; 122 Stat. 620), notwithstanding any other provision of law, the maximum dollar amount limitation on the principal obligation of a mortgage for such size residence for such area for purposes of such section 203(b)(2) shall be considered (except for purposes of section 255(g) of such Act (12 U.S.C. 1715z-20(g))) to be such dollar amount limitation in effect for such size residence for such area for 2008.

So far I've found no one who will actually commit to what it means so I'll likely just wait for a mortgagee letter to define it. If I do get more specific info I'll gladly share and request you do the same. Thanks!

Gerry Suarez, Jr.

Your FHA Loan Pro!

FEB

Gerry,

Thanks for your prompt reply.

My layman's interpretation: (notwithstanding references to Housing Acts, etc) If you are applying for an FHA loan in 2009 for an amount that is less than the approved 2008 FHA loan limit in your area, then the limit for the 2009 FHA loan is no less than the approved 2008 FHA limit for that area.

I think that means the limits are the same as 2008?

I'll back to you if I get more clarification.

Best
Chris

Chris-In a nutshell that's exactly how I read it, however NAR, NAHB and HUD have all been silent regarding this even though it's clearly in the bill!

If we who are in the industry are having a hard time with this, what makes you think our politicians knew what the heck they were voting for? To make things even worse, two paragraphs down in the same section this verbiage appears almost exactly the same, except reflecting Fannie/Freddie loan limits...

Has anyone mentioned that?

Gerry Suarez, Jr.

Your FHA Loan Pro!