The President Signs the New Housing Relief Bill

Housing Bill to White House for Approval What it Means to You.

The Housing Relief Bill went in front of the White House this week for final approval after a green light was given by the House of Representatives and the Senate.   The following are some key provisions for the new law which will go into affect by October 1, 2008.  

* Fannie Mae and Freddie Mac, which each have a $2.25 billion (1.13 billion pound) line of credit with the Treasury, would see their current government loan limit raised until January 2009.

* If the companies' financial condition were to reach a crisis, Treasury could take an equity stake in either company. That power, too, would expire in January 2009.

* There is a better-than-even chance that the emergency measures will not be needed, meaning there will be no cost to taxpayers. If the lifeline is required, the Congressional Budget Office said, there is a 5 percent chance that the companies may need $100 billion but more likely would need $25 billion.

* A new regulator would be created with broad powers to set capital levels for Fannie Mae and Freddie Mac, with the Fed's consultation.

* The Federal Housing Administration would be authorized to refinance up to $300 billion in failing mortgages with Fannie Mae and Freddie Mac covering billions in expected losses.

* Fannie Mae, Freddie Mac and FHA would be permitted to purchase loans as large as $625,500 in high-cost areas -- a big increase from the $417,000 cap typically in place.

* Local communities that are burdened with maintenance of abandoned properties would have access to nearly $4 billion in federal grants to buy and repair those homes.

* Many first-time home buyers would be eligible for a tax break worth up to $7,500, and $200 million would be offered to foreclosure-prevention programs.

* Local governments would have authority to issue an additional $11 billion of tax-exempt bonds to refinance shaky loans.

* The bill would increase the federal debt limit by $800 billion to $10.6 trillion.

* Sellers will not be allowed to contribute to down payment assistance programs like Nehemiah and Ameridream. If you have an active loan or prospect, the loan must be approved by September 30 to keep the down payment assistance program.

First time home buyers will receive a tax credit of 10% of the sale price up to $7,500 if purchasing by July 1, 2009.