Brief details on the "New" housing bill

I want to take just a moment and cover the primary changes in the bill HR 3221, with 800 pages I am going to only make comments on 5 points:

On Sept 30th 2008 DPA (Down Payment Assistance) programs will end. What does that mean?

Today a buyer can write an offer and ask the seller to up to 6% of the purchase price to be applied to the buyers recurring and non recurring closing costs/down payment. This has allowed a large group of credit worthy buyers to buy today. No more as of the end of Sept!

FHA Loan to Value decrease:

Buyers will need 3.5% cash to buy, up from 3.0%. Sounds small but combined with the end of DPA more buyers are going to be locked out of the market.

FHA MIP (Mortgage Insurance Premium" will increase:

Rate will go up from 2.25% to 3.00%. The loan insurance will go up slightly (this insurance for the loan is usually less than 4 years in duration).

$7,500 Tax Credit:

First Time Buyers (that is anyone who bought and did not won a home in the prior 3 years) can get a $7,500 tax credit if they purchase a home from April 9th 2008 to July 1st 2009. Look at this as an interest free loan for 15 years paid back at $500 per year.

Hope for Home Owners:

Upside down on the loan and want to keep the home? IF you qualify the lien holder will work the the borrower to write down the mortgage to no more the 90% of the appraised value. Example: if a borrower owes $300,000 but the home is worth $200,000 the borrower will receive a new loan for 90% of $200,000, which equals $180,00. The $120,000 is forgiven.

That is all for today.