“Bush signs housing rescue law”
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FHASecure Housing Bill
NEW YORK (CNNMoney.com) – President Bush on Wednesday signed into law a sweeping housing bill that aims to boost the struggling housing market and bolster mortgage finance giants Fannie Mae and Freddie Mac.
The Senate voted 72-13 in favor of the bill on Saturday, after the House passed it three days earlier.
The cost of the program– which would begin on Oct. 1 and be in place for just a few years – will be funded by fees from Fannie and Freddie, along with fees paid by both lenders and borrowers.
The law authorizes FHA to insure up to $300 billion in loans.
There is a permanent increase in “conforming loan” limits.The law will permanently increase the cap guaranteed by Fannie Freddie to $625,500.00. The higher loan limits will make it easier for borrowers to get mortgages, because those mortgages are more likely to be traded if they are considered conforming.
A new home-buyer credit.The new law includes a tax refund for first-time home buyers worth up to 10% of a home’s purchase price but no more than $7,500.00.
A new affordable housing trust fund.The law establishes a permanent fund to promote affordable housing. The fund will be paid for by fees from Fannie and Freddie.
Grants to states to buy foreclosed propertiesThe law grants $4 billion to states to buy up and rehabilitate foreclosed properties.
Fannie and Freddie guarantee the purchase and trade of mortgages and own or back to $5.2 trillion in mortgages.
*The information above was quoted from CNNMoney.com.