The Senate has paved the way for President tosign the housing stimulus package into law.

The real estate market should get a boost from the new housing stimulus package that is expected to be signed into law by President Bush as early as Monday, July 28.

The bill is not without controversy as it essentially puts American taxpayers on the hook for trillions of dollars of mortgage backed loan securities. The government essentially was forced to act with the broad legislation as home foreclosures have been increasing for the past two years and home owners have seen their home values decline by over 10% nationally. Housing markets in Arizona and California have seen price declines in excess of 30% over the past twelve months as home owners are simply walking away from homes they bought less than twenty four months ago because the price declines have been so rapid.

The key points of the new housing bill are as follows:

• Rebates for first time home buyers up to 10% of the homes value, with a max credit of $7500
• Three hundred billion dollars of funds towards FHA to help home owners refinance their mortgages.
• Expanding the federal debt limit to 10.6 trillion
• Reforms for Fannie Mae and Freddie Mac
• Raising the size of loans eligible for sale to Fannie Mae and Freddie Mac to 115% of the median sales price, capped at $625,000 nationally.
• Emergency funding options and credit lines for Fannie Mae and Freddie Mac of up to 2.25 Billion dollars
• Millions of dollars for pre foreclosure counseling and housing grants.

7-27-2008 ? LoanNetwork.com

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