With an overwhelming vote of 72-13 the massive housing bill that Congress has been feverishly working on passed in a rare Saturday vote in the U.S. Senate today. The bill now goes to President Bush who is expected to sign it into law without any fanfare early next week. While there is opposition to the bill from some conservatives who complain that the government is “bailing out” too many Americans and American banks the vast majority of Congress has supported the legislation in response to the pain and needs of their constituents. The overwhelming votes in both the House and the Senate, along with the President’s announcement that he will not oppose the bill are indicative of its broad appeal to voters across the country.
Here are some FHA-specific provisions of the new bill as outlined in a recent AP article. The new law will:
_Give the Federal Housing Administration $300 billion in new lending authority and relax standards to provide affordable, fixed-rate mortgages to an estimated 400,000 debt-ridden homeowners. Any losses would be covered by an affordable housing fund financed by Fannie Mae and Freddie Mac, the government-sponsored companies that finance mortgages.
_Provide $3.9 billion in grants to the hardest-hit communities for buying and fixing up foreclosed property.
_Modernize the FHA and allow it to back loans for riskier borrowers. Permanently increase the size of loans the agency may insure — currently set to revert to $362,790 by the end of the year — to $625,000 in the highest-cost areas. The agency could insure loans 15 percent higher than the median home price in certain cities.
_Forbid the FHA from insuring mortgages in which the borrower’s down payment is paid by the seller, beginning on Oct. 1, 2008. Place a one-year moratorium forbidding the agency from charging premiums based on the riskiness of the homeowner, until Oct. 1, 2009.
_Provide $15 billion in housing tax breaks, including for low-income housing. Give a credit of up to $7,500 for first-time home buyers who purchase residences between April 9, 2008, and July 1, 2009. Allow people who don’t itemize their taxes to claim a $500-$1,000 deduction on their 2008 property taxes.
_Offer protection from investor lawsuits for mortgage holders that modify loans to borrowers who are in default or about to default.
_Provide $180 million for pre-foreclosure counseling and legal services for distressed borrowers.