Tax Credit being offered on FHA Loans to First Time Home Buyers

Have you heard about the tax credit recently created to help first time home buyers or buyers that have not owned a home in over 3 years. This is only on FHA (Federal Housing Administration) loans and according to the secretary of H.U.D., home buyers will be allowed to use the $8,000 first-time homebuyer tax credit towards their DOWN PAYMENT on purchases financed by FHA loans. FHA will allow approved lenders, nonprofits, and government agencies to advance the funds in the form of interest free bridge loans that buyers would use for down payments. Buyers would repay the loans after they receive their tax refunds. More information is to come from FHA soon.

If you are interested in this new tax credit or have questions regarding real estate send me a email/comment and I will work to answer your question.

Senate passes Bailout – Making Sense of it All

The Senate passed the 700 Billion dollar Bailout of Freddie Mac and Fannie Mae today.  I am curious if everyone out there knows what these companies do and why the Government stepped in to help out.

First, to help clear some of the confusion, these two companies are mortgage guarantors.  Fannie Mae was created back in the Great Depression by Roosevelt’s administration to back loans by private banks in order to make homeownership more assesible.  Years later the government allowed Fannie Mae to be privately managed. Freddie Mac was created by the government to keep Fannie Mae from becoming to big.

Fannie Mae and Freddie Mac guarantee more than $5 trillion in mortgages, almost half of those in the United States, With many of the mortgages defaulting, the companies are, in effect, bankrupt.  These two companies are such a large part of our financial system that failure of one or both would be detrimental Nationally and Globally.

This takeover was put in place to protect us, the taxpayer. How, well the U.S. government will be creating more demand in the marketplace by buying Fannie and Freddie mortgage bonds, homeowners and buyers should start seeing lower mortgage rates.  This may become one of the best times to purchase or refinance your home.

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