For more information please contact:
Ronnie Giberson
Sales Manager
704-206-7762 Office
704-562-6194

HR 3221
Housing and Economic Recovery Act of 2008

For detailed information on the entire 789 pages go to www.thomas.gov and search by bill number for HR 3221; make sure to view the ?ENR? version which is the final version that was ?Enrolled as Agreed to or Passed by Both House and Senate.
Helpful link: http://www.realtor.org/gapublic.nsf/pages/hr_3221_key_provisions

New FHA Guidelines:

• Same $625,500 limit as conforming in higher cost areas
• 3.5% minimum down payment
  • Can come from family members
  • Can attach a 2nd lien on the property up to 100% CLTV
  • Cannot come from seller, any person that benefits financially from the transaction, or any down payment assistance programs effective October 1, 2008
• Max UFMIP is raised to 3%.Varies by loan program ie 203k(rehab) and 234c(condo) will likely have larger requirements than the less risky 203b(single family).
• Expansion of FHA Reverse Mortgage Program
  1. Home purchases
  2. Same $625,500 loan limit
• One year moratorium on FHA risk based pricing effective October 1, 2008

Other notes and talking points:

• BIG DEAL: FHA now allows for 2nd liens up to 100% CLTV
  1. Beware of different HUD level underwriting guidelines
  2. 0Arrange private loans through www.VirginMoneyUS.com
• Get FHA approved and study the guidelines. FHA is back for good and it?s the replacement for sub prime at least for the next few years.

Down Payment Assistance

• Only eliminates seller funded DPAs 028% default rate on these loans; this is 3 times the default rate on FHA loans without seller funded DPA
  1. High default rates are causing the FHA to raise premiums on all loans or receive federal subsidy for the first time in its 71 year history

Tax incentives:

• First time home buyer tax credit of 10% of the purchase price of the home not to exceed $7,500
• In the case of two or more individuals who are not married, $7,500 is the total credit for all individuals combined
• ?Refundable? credit means that if the actual tax liability was, say, $5,000, the purchaser would have the entire $5,000 tax liability wiped out plus they would receive a tax credit refund of $2,500.
• Phase out if modified adjusted gross income exceeds $75,000 ($150,000 if married, filing jointly)
• Completely goes away if income reaches $95,000 ($170,000 if married, filing jointly)
• First Time Home Buyer defined as not owning a home within 3 years
• Cannot purchase home from a related person
• Recapture of credit over 15 years (accelerated recapture if the home is sold or ceases to be primary residence
• Applies to purchases made between April 9, 2008 and July 1, 2009
• Standard deduction for non-itemizers increased by up to $500 ($1,000 if married, filing jointly) for property taxes