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New Legislation supports housing

by Tanya Power

The following is from the National Assoc. of Realtors.  Would you consider purchasing a new home if you could have a $7,500 credit on your taxes.  Wow - This is great!

National Association of REALTORS®
Summary of Key Provisions of H.R. 3221 - The Housing Stimulus Bill (as of 7/30/08)


H.R. 3221, the “Housing and Economic Recovery Act of 2008,” passed the House on July 23, 2008, by a vote of 272-152. On Saturday, July 26, 2008, the Senate passed the bill by a vote of 72-13. The President signed the bill on July 30, 2008. The bill includes the following provisions:


 

  • GSE Reform – including a strong independent regulator, and permanent conforming loan limits up to the greater of $417,000 or 115% local area median home price, capped at $625,500. The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).
  • FHA Reform – including permanent FHA loan limits at the greater of $271,050 or 115% of local area median home price, capped at $625,500; streamlined processing for FHA condos; reforms to the HECM program, and reforms to the FHA manufactured housing program. The downpayment requirement on FHA loans will go up to 3.5% (from 3%). The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).
  • Homebuyer Tax Credit - a $7500 tax credit that would be would be available for any qualified purchase between April 8, 2008 and June 30, 2009. The credit is repayable over 15 years (making it, in effect, an interest free loan).
  • FHA foreclosure rescue – development of a refinance program for homebuyers with problematic subprime loans. Lenders would write down qualified mortgages to 85% of the current appraised value and qualified borrowers would get a new FHA 30-year fixed mortgage at 90% of appraised value. Borrowers would have to share 50% of all future appreciation with FHA. The loan limit for this program is $550,440 nationwide. Program is effective on October 1, 2008.
  • Seller-funded downpayment assistance programs – codifies existing FHA proposal to prohibit the use of downpayment assistance programs funded by those who have a financial interest in the sale; does not prohibit other assistance programs provided by nonprofits funded by other sources, churches, employers, or family members. This prohibition does not go into effect until October 1, 2008.
  • VA loan limits – temporarily increases the VA home loan guarantee loan limits to the same level as the Economic Stimulus limits through December 31, 2008.
  • Risk-based pricing – puts a moratorium on FHA using risk-based pricing for one year. This provision is effective from October 1, 2008 through September 30, 2009.
  • GSE Stabilization – includes language proposed by the Treasury Department to authorize Treasury to make loans to and buy stock from the GSEs to make sure that Freddie Mac and Fannie Mae could not fail.
  • Mortgage Revenue Bond Authority – authorizes $10 billion in mortgage revenue bonds for refinancing subprime mortgages.
  • National Affordable Housing Trust Fund – Develops a Trust Fund funded by a percentage of profits from the GSEs. In its first years, the Trust Fund would cover costs of any defaulted loans in FHA foreclosure program. In out years, the Trust Fund would be used for the development of affordable housing.
  • CDBG Funding – Provides $4 billion in neighborhood revitalization funds for communities to purchase foreclosed homes.
  • LIHTC – Modernizes the Low Income Housing Tax Credit program to make it more efficient.
  • Loan Originator Requirements – Strengthens the existing state-run nationwide mortgage originator licensing and registration system (and requires a parallel HUD system for states that fail to participate). Federal bank regulators will establish a parallel registration system for FDIC-insured banks. The purpose is to prevent fraud and require minimum licensing and education requirements. The bill exempts those who only perform real estate brokerage activities and are licensed or registered by a state, unless they are compensated by a lender, mortgage broker, or other loan originator.


Monday morning real estate market update

by Tanya Power

Being the third quarter of the year, which historically is a good time for families to be buying their vacation homes in Hawaii, I am seeing the number of buyers down a bit - though the dollar amount of the houses/condos they are buying is increasing.  The $450,000 and below price range is moving with bargain buyers being the purchasers in this price range. 

Bargain buyers are looking for deals, distress situations, and just plain motivated sellers.  They make offers that 2 years ago would have been scoffed at.  AND they are getting the prices they are looking for.  Moral of that story - make the offer - you never know what motivates a Seller.

The other price range moving is above $800,000.  These are the families and retirees getting their piece of paradise while the gettin' is good!  Prices are the  best we have seen since 1999....for the inventory that is selling.  These properties are generally near the ocean, in a resort community, or have an ocean view.

As always, there are still properties priced above the market rate....and they just sit.  Showings and previews of these properties are few and far between. 

Paradise is still here waiting for you.  Are you considering it???  Come to the Big Island and check it out!

Lucky to live in the United States

by Tanya Power

After returning from two weeks in Switzerland and Northern Italy, I once again am reminded how blessed we are to live in the US.  After witnessing the prices, and more importantly, the availability of housing in these other countries, I feel blessed.  In the town of Murten Switzerland, there is a moratorium on building.  Only so many houses can be built.  If you are lucky enough to find a house for sale (supply and demand) a small home begins at the 500,000 Euro range.  At the current exchange rate, well.....that's a lot of USD's$$$$.

America was founded on the concept of a lot of people owning a small amount of land (not like the huge landowners of the British system where land = wealth and power).  We are so fortunate to have our land available to us and have the American Dream alive and well.  So on this 4th of July week, count your blessings and make sure one of them is the fact you CAN OWN land in this great Nation!

 

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Tanya T Power
Windermere / C and H Properties
PO Box 476
Kailua Kona HI 96745
8089606060
8089606060
Fax: 8089606060