The Senate passed the Housing Rescue Bill over the weekend and sent it to the President for signature. He signed it this morning. What does this mean to you?
Homebuyer Tax Credit - First Time Home Buyers (those who have not owned a home for 3 years) will get a Tax Credit of up to $7500 for purchasing a home between April 9, 2008 and July 1, 2009. The credit is repayable over 15 years (making it, in effect, an interest free loan). This credit should create more movement in the market. First time home buyers will be able to buy homes from sellers that want to move up, therefore, allowing them to buy the new house they want and so on.
On big change for current buyers to be aware of is that this bill bans Seller Paid Down Payment Assistance effective October 1st, 2008. Meaning a buyer can not get down payment assistance funded by those who have a financial interest in the sale. This does not prohibit other assistance programs provided by other sources, churches, employers, or family members. There are only 63 days of Down Payment Assistance left. Along these lines it should be known that the down payment requirement on FHA loans will go up to 3.5% from 2.75%.