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On January 28, the U.S. House of Representatives passed HR 1, the American Recovery and Reinvestment Act of 2009, on a largely party line vote of 244-188.  The economic stimulus bill, as the legislation is more commonly known, contains a number of key provisions for Home Owners, REALTORS®, Home Sellers, and Home Buyers:

• Restoration of the 2008 Loan Limits for FHA, Fannie Mae and Freddie Mac to 125% of median home price up to a limit of $729,750;
• Elimination of the repayment provision of the $7,500 first time home buyer tax credit;
• Expansion of tax-exempt housing bonds;
• Increased funding for the Rural Housing Service program;
• Additional funding for neighborhood stabilization activities under the Community Development Block Grant program;
• Incentives to promote weatherization and energy efficiency;
• Retrofitting federally assisted housing for energy efficiency; and
  
• An expansion of the Hope VI low-income housing construction and rehabilitation program.

The House has also addressed a number of housing issues in legislation revamping the Trouble Asset Relief Program.  Among the housing provision off interest in the TARP Reform and Accountability Act of 2009 (HR 384) are:

• A mortgage buy-down program to reduce rates below current prevailing market rates;
• Increased foreclosure prevention and mitigation efforts;
• Ensuring liquidity in the residential and commercial mortgage markets; and
  
• Streamlining efforts to "unclog" the credit markets and increase the availability of credit to worthy customers.

So, if you are a home buyer, the higher FHA loan limits have been reinstated.  This means you can get an FHA loan with competitve interest rates and with only 3% down payment.  More good news buyers: if you are a 1st time buyer and have to move before the repayment time limit, you do not have to repay your tax credit.

As a home owner and/or home seller there are now tax credits for weatherizing and increasing energy efficiency of your home.  1st small step to eco-friendly I guess.  But to make the improvements, get a tax credit, and then have a features and benefits tool to make your home more attractive to buyers when you decide to sell - well that is win-win!

The troubled assets relief programs should help everyone.  By freeing credit, it may reinstitute home equity lines; hopes to provide more funding for more home buyers, in turn jump starting the real estate market; require more creative assistance to homeowners facing foreclosure.

Thank you House of Representatives.  We are not there yet, but this legislation should help.

Fannie Mae - Rule Change: Allows Investors to own up to 10 financed properties!

Last year, Fannie Mae rules were changed to limit investors to having a maximum of four mortgages outstanding. That rule, in effect, limited investors to owning four properties. The rule exacerbated the over-supply situation and slowed the market's ability to absorb the standing supply of housing. It was a bad rule with bad timing and AREA encouraged real estate agents and appraisers to voice opposition to the rule. This is why investors with cash are buying and foreclosures priced under $50,000 are selling.  There has been an additional dip in the market for properties listed $90,000-$150,000.

Congratulations! Our voices were heard. Fannie Mae changed its rule. The change is more in line with the traditional banking industry rules which allow investors to own and finance up to 10 one to four family properties. The new rule requires the investor to make a 25% down payment and have a credit score of at least 720.

Additional requirements to be met for the fifth to the tenth house include the following:

• No bankruptcy or foreclosure within past 7 years,
• No delinquencies longer than 30 days in the past 12 months,
• Must be able to document income from the new property as well as existing rentals,
• Must provide release of income tax returns for prior two years, and
• Must maintain reserves for the new property and existing rentals

The entire rule can be found in Announcement 09-02 at eFannieMae.com. This is good news for the real estate industry. It will help the recovery, encourage more real estate sales, and create more work for agents, appraisers, and home inspectors