Housing and Economic Recovery Act of 2008 and what it's designed to do.
"Housing and Economic Recovery Act of 2008," . The President signed the bill on July 30, 2008, with the following provisions included:
A temporary first-time home buyer tax credit. The tax credit will stimulate home buying, should reduce excess supply in housing markets and stabilize home prices.
FHA modernization and expansion. A revitalized FHA will have greater flexibility to respond to the needs of borrowers, enable more working families to become home owners and play an important role in the mortgage markets, addresses the foreclosure crisis. In addition the FHA is given the authority to insure up to $300 billion of mortgages to refinance loans headed for foreclosure.
GSE (government-sponsored enterprise) reform. The law reforms the regulation of Fannie Mae and Freddie Mac and permanently increases the conforming loan limit to help buyers in high-cost markets. To reassure financial and global markets, the government will temporarily expand its line of credit to Fannie and Freddie and permit the U.S. Treasury to purchase an equity stake in the companies through the end of 2009.
Mortgage Revenue Bond Program. The measure gives states the ability to issue an additional $11 billion in mortgage revenue bonds, which will help strapped borrowers seeking to refinance their home loans.
Low Income Housing Tax Credit. Enhancing this program will expand the supply of much-needed affordable rental housing.
Tax Credit for First Time Homebuyers is the Focus of the Housing Bill
The spotlight of the housing bill is a temporary, $7,500 first-time home buyer tax credit for the purchase of any home. The tax credit can be used for homes purchased between April 9, 2008 and July 1, 2009. It is expected to provide a significant-and temporary-financial incentive for home buyers.
The tax credit is the incentive that experts hope will jump start the housing market, get homebuyers back into the market and allow first-time homebuyers to make their purchase. Further more it is hopeful that home prices are stabilized to preserve the economy as a whole.