Real Estate Information Archive


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by Group One Realty Team - Real Estate One





H.R. 3221

Housing and Economic Recovery Act of 2008



Amount of Credit


Ten percent of cost of Home, not to exceed

$7500  Click Here for more info



Eligible Property


Any single-family residence (including condos, co-ops) that will be used as a principal residence.





Yes.  Reduces income tax liability for the year of purchase.  Claimed on tax return for that tax year.



Income Limit


Yes.   Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return).  Phases out above those caps ($95,000 and $170,000, respectively).



First-time Homebuyer Only


Yes.   Purchaser (and purchaser’s spouse) may not have owned a principal residence in 3 years previous to purchase. 




Yes.  Portion (6.67 % of credit) to be repaid each year for 15 years.  If home sold before 15 years, then remainder of credit recaptured on sale.



Impact on District of Columbia Homebuyer Credit


DC credit not available if purchaser uses this credit.



Effective Date


Purchases on or after April 9, 2008





July 1, 2009


Interaction with Alternative Minimum Tax

Can be used against AMT, so credit will not throw individual into AMT.  

This credit is in effect now.  Get started looking at home.  Click here for direct MLS access for the Ann Arbor and surrounding areas.

HR 3221, the Housing and Economic Recovery Act of 2008

by Group One Realty Team - Real Estate One

(as of 7/24/08)


H.R. 3221, the “Housing and Economic Recovery Act of 2008,” passed the house on July 23rd by a vote of 272-152.  The Senate must now approve the language adopted by the House.  The Senate is expected to approve the bill on Friday, July 25th or Saturday, July 26th.   The President has said he will sign the bill.  It includes:


·         GSE Reform – including a strong independent regulator, and permanent conforming loan limits up to the greater of $417,000 or 115% local area median Home price, capped at $625,500.  The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).


·         FHA Reform – including permanent FHA loan limits at the greater of $271,050 or 115% of local area median Home Price, capped at $625,500; streamlined processing for FHA condos; reforms to the HECM program, and reforms to the FHA manufactured housing program. The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).


·         Homebuyer Tax Credit - a $7500 tax credit that would be would be available for any qualified purchase between April 8, 2008 and June 30, 2009.  The credit is repayable over 15 years (making it, in effect, an interest free loan).


·         FHA foreclosure rescue – development of a refinance program for homebuyers with problematic subprime loans.  Lenders would write down qualified mortgages to 85% of the current appraised value and qualified borrowers would get a new FHA 30-year fixed mortgage at 90% of appraised value.  Borrowers would have to share 50% of all future appreciation with FHA.  The loan limit for this program is $550,440 nationwide.  Program is effective on October 1, 2008.


·         Seller-funded downpayment assistance programs – codifies existing FHA proposal to prohibit the use of downpayment assistance programs funded by those who have a financial interest in the sale; does not prohibit other 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.


·         VA loan limits – temporarily increases the VA home loan guarantee loan limits to the same level as the Economic Stimulus limits through December 31, 2008.


·         Risk-based pricing – puts a moratorium on FHA using risk-based pricing for one year.  This provision does will be effective from October 1, 2008 through September 30, 2009.


·         GSE Stabilization – includes language proposed by the Treasury Department to authorize Treasury to make loans to and buy stock from the GSEs to make sure that Freddie Mac and Fannie Mae could not fail.


·         Mortgage Revenue Bond Authority – authorizes $10 billion in mortgage revenue bonds for refinancing subprime mortgages.


·         National Affordable Housing Trust Fund – Develops a Trust Fund funded by a percentage of profits from the GSEs.  In its first years, the Trust Fund would cover costs of any defaulted loans in FHA foreclosure program.  In out years, the Trust Fund would be used for the development of affordable housing.


·         CDBG Funding – Provides $4 billion in neighborhood revitalization funds for communities to purchase foreclosed homes.


·         LIHTC – Modernizes the Low Income Housing Tax Credit program to make it more efficient.

·         Loan Originator Requirements – Strengthens the existing state-run nationwide mortgage originator licensing and registration system (and requires a parallel HUD system for states that fail to participate).  Federal bank regulators will establish a parallel registration system for FDIC-insured banks.  The purpose is to prevent fraud and require minimum licensing and education requirements.  The bill exempts those who only perform real estate brokerage activities and are licensed or registered by a state, unless they are compensated by a lender, mortgage broker, or other loan originator.

Click here for a copy of the bill lanuage.

Time to look for Property. Seller paid concessions run out on FHA loans Oct 1, 2008!.  Click here to get started with direct MLS Access for the Ann Arbor Michigan Area.

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