Bush did sign a historic housing recovery bill today in efforts to boost Fannie Mae and Freddie Mac.  Many changes affect the Federal Housing Administration as well so let’s review some.

• $300 billion dollars to fund FHA and expand their programs.  One includes allowing qualified homeowners to refinance their homes at 90% of the current appraised values!  But this is subject to lender participation as they will be writing down principal loan balances.
• Raising the Fannie Mae, Freddie Mac and FHA loan limits in high costs areas to 115% of the median home price or $625,500.  Great stuff for high cost areas only. 
• A tax credit up to 10% of the sales price but no more than $7,500, for first time home buyers.

These are just a few of the major changes this bill has introduced to the Florida mortgage market.  This changes will take place on October 1st of 2008.  A couple of thoughts on negative changes that will affect some first time home buyers include:

• Non profit groups will no longer be allowed to extend seller-funded down payment assistance.
• The tax credit actually has to be paid back in 15 years interest free, though.
• Down payment requirements for FHA loans will increase from 3.0% to 3.5%.

If you are a first time home buyer thinking about buying your new Florida dream home; start now.  Qualifying is going to get tighter by this October with higher down payment requirements.  If you need a Florida mortgage professional to speak with call our office at 888.399.0520 or email your questions.

Trackback URI | Comments RSS