Chicago Real Estate Blog

How Will New Real Estate Bill Help American Homeowners & Homebuyers?

It is anticipated that the new federal legislation working its way through Capitol Hill would help some 400,000 homeowners who are in danger of foreclosure. Assistance is offered to those who have a home loan debt-to-income ratio greater than 31% and are not able to pay their mortgage. The relief comes in the form of an affordable 30-year fixed-rate FHA loan. Borrowers are required to share any forthcoming appreciation gains with the government as repayment for the help, but that beats losing your home altogether. And, in order to be eligible for the FHA loan, your lender must decrease the principal balance on the mortgage to 85% of its current market worth.

First-time homebuyers (which include people who have not owned property for three years or more) would get excellent tax incentives through this bill – $8,000 in tax savings for couples and $4,000 for an individual buyer. Even previous homeowners who have been renting and want to take advantage of the lower prices can cash in on this “first-time buyer” clause. There are maximum income restrictions, however. Couples making more than $150,000 per year ($75,000 for individuals) will not qualify for the credit. Those who do qualify are expected to repay the IRS within 15 years time, but the upfront cash is projected to be a major selling point for potential buyers who are considering entering the real estate market this year.

The bill also offers advantages for high-end real estate buyers. Check out the next entry to find out how.

Posted at 09:14AM Jul 16, 2008 by Spencer Mason in General  |  Comments[0]