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Monday, August 04, 2008

Housing Rescue Bill

Here are some key provisions of the Act:

Standard Property Tax Deduction:

You will be allowed to deduct property taxes even if you don't itemize deductions. The standard deduction is $500 for single filiers and $1000 for joint filers.

FHA:
Down payment requirement on FHA loans goes up to 3.5% (from 3%).

Home Buyer Tax Credit:
10% of cost of home (not to exceed $7500) tax credit available for owner occupied homes (yes, includes condos and townhomes) for purchases between April 9, 2008 and June 30, 2009. Purchaser (and spouse) must not have owned a home over the past three years. There are income limits. This is really an interest free loan which is repaid over 15 years.

Down Payment Assistance Programs:
Prohibits use of down payment assistance programs where the funds are coming from someone with a financial interest in the sale. This doesn't go into effect until October 1, 2008.

FHA Foreclosure Rescue:
Qualified borrowers would get an FHA mortgage at 90% of appraised value. Borrowers will have to share future appreciation with FHA. Borrowers have to live in the home and have had a loan issued between January 2005 and June 2007. Also, homeowners must be spending at least 31% of their gross income on mortgage debt. There is more - click here for additional details.

VA Loan Limits:

Temporarily increased VA home loan limits.

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