Top 3 Benefits of HR 3221

The Housing and Economic Recovery Act of 2008 is a $300 Billion rescue plan aimed at helping struggling homeowners avoid foreclosure. Although the bill is several hundred pages long and contains a number of far-reaching provisions, here are the top three changes that may benefit you:

1. Tax credits. First-time home buyers who purchase their primary residence between April 8, 2008 and July 1, 2009 are eligible for up to $7,500 in tax credit, provided they haven't owned a home in the last three years and fit certain income parameters. The credit is generous, but it is actually an interest-free loan that is paid back over 15 years at $500 per year when taxes are filed.

2. Larger loans at lower rates. This is a great benefit for homeowners with "jumbo" mortgages, which range between $417,000 and $625,000. If you are considering purchasing a home in that price range, this provision may be ideal for you. Please call or email to schedule a meeting to discuss your options.

3. FHA Hope for Homeowners. This provision is designed to help homeowners who are "upside down" on their mortgage - that is, people who owe more on their house than they can sell it for in today's market. Essentially, this plan allows borrowers who meet specific requirements to refinance their mortgages to new 30-year fixed FHA mortgages. If you're upside down on your mortgage and struggling in today's economy, this is an option worth exploring.

Mortgage Interest Rates*

Rates as of Friday, 7th November, 2008:

 

Conforming

APR

Payment per
$1,000

Jumbo

APR

Payment per
$1,000

30-Yr. fixed

6.125%

6.265%

$6.08

6.625%

6.722%

$6.40

15-Yr. fixed

5.875%

6.107%

$8.37

5.875%

6.030%

$8.37

7-Yr. fixed ARM

6.250%

6.391%

$6.16

6.000%

6.093%

$6.00

5-Yr. fixed ARM

5.500%

5.635%

$5.68

5.750%

5.842%

$5.84

3-Yr. fixed ARM

5.500%

5.635%

$5.68

5.625%

5.716%

$5.76

5-Yr. Interest Only

5.625%

5.761%

$4.69

6.000%

6.093%

$5.00

 

 

*Rates are subject to change due to market fluctuations and borrower's eligibility.

Licensed Mortgage Banker, NJ Department of Banking and Insurance. Corporation also services CO, CT, DE, FL, GA, IN, MA, MD, MN, MI, NC, NH, NY, PA, SC, TN, VA, & RI.

 
2 comments • Karl Peidl - Accredited Loan Consultant • November 07 2008 12:17PM

HR 3221 - Tax Credit Provision FAQ

Since the signing of HR 3221 on July 30th, there has been much discussion of just what this bill means.  Anytime we are dealing with an 800 page document written by politicians and attorneys, there is going to be confusion.  Much of the language in the bill is vague and open to some degree of interpretation.  Because of this, I have been looking to other mortgage industry experts and leaders for answers.

One of the most intrguing and discussed aspects of this bill is the First Time Home Buyer Tax Credit.  This provision allows for First Time Home Buyers to receive a tax credit of upto $7,500 if they purchase a home from April 9, 2008 until July 1, 2009. 

Below are two great resources that address Frequently Asked Questions regarding the tax credit.

http://www.federalhousingtaxcredit.com/faq.php

http://www.realtor.org/gapublic.nsf/files/hbtaxcreditqa2008.pdf/$FILE/hbtaxcreditqa2008.pdf

Both of these sources help explain just what a tax credit is and who is eligible.  A couple of points of interest that I have not seen discussed previously:

1. There is no precedent and not much is known about just how the repayment of this tax credit will work.

2. If the financing is obtained by means of mortgage revenue bonds (i.e., through a tax-exempt bond-related financing program offered by a state housing agency), then the purchaser is not eligible for the tax credit.

As more information becomes available, I will be sure to share.

2 comments • Karl Peidl - Accredited Loan Consultant • September 10 2008 09:47AM