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News and commentary
Thank you for contacting USA.gov.
By Richard Suttmeier
Updated: Thursday, October 09 2008 07:10:AM
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Thank you for contacting USA.gov.
Hear is the response to the question I emailed to HUD, The Housing Bill passed in July authorized $300 billion to help refinance mortgages originated between January 2005 and July 2007. This part of the bill went into effect on October 1, 2008. What is the status of getting a program in place?
The canned response was - Dear USA.gov Visitor, Thank you for your message to USA.gov. We have received your message and, if you provided an e-mail address, we will respond within two business days or sooner.
Sincerely,
The USA.gov Citizen Response Team
The Formal Response from HUD
We understand you would like information about the Housing and Economic Recovery Act of 2008.
The Housing and Economic Recovery Act of 2008 was passed into law on July 30, 2008. Its overall purpose is to help prevent foreclosures, restore home values, stabilize the housing market and create economic growth. It is expected to help as many as 400,000 borrowers that are in danger of losing their home to foreclosure.
Although the program begins October 1, 2008, if you are in danger of losing your home before that date, you should not wait to contact your loan servicer. You should begin applying for a federally insured mortgage now. The program ends September 30, 2011.
Through the U.S. Department of Housing and Urban Development (HUD) and the Federal Housing Administration (FHA), borrowers will be able to refinance into more affordable government-insured mortgages. If the homeowner sells the home in the future, the FHA will get a portion of any profits to recoup the government's investment over the long run.
Lenders will have to agree to an initial loss in profit to participate, but the lender's participation is completely voluntary. The program offers government insurance to lenders who agree to reduce mortgages for homeowners at risk of foreclosure to at least 90 percent of what the property is currently worth. You may wish to search for lenders in your area at the following link:
http://www.hud.gov/ll/code/llslcrit.cfm Or call HUD's National Servicing Center at 1-888-297-8685.
For those who still find themselves unable to afford the cost of owning their own home, the bill also includes provisions to increase the supply of affordable housing. For qualified first time buyers, who purchased a home after April 8, 2008 or will purchase a home before July 1, 2009, there is a refundable tax credit available. This credit is for 10 percent of the purchase price of the home, with a maximum available credit of $7,500 for either a single taxpayer or a married couple filing jointly. The credit is reduced or eliminated for higher-income taxpayers.
This tax credit works like an interest free loan that must be paid back over 15 years. Normally, it is repaid in 15 equal annual installments beginning with the second tax year after the year the credit is claimed. The repayment amount is included as an additional tax on the taxpayer's income tax return for that year. If you properly claim a $7,500 first-time homebuyer credit on your 2008 return, you will begin paying it back on your 2010 tax return. Normally, $500 will be due each year from 2010 to 2024. You may wish to view more information on this tax credit and exceptions to the repayment rule at:
http://www.irs.gov/newsroom/article/0,,id=186831,00.html
The Housing and Economic Recovery Act of 2008 was passed into law on July 30, 2008. Its overall purpose is to help prevent foreclosures, restore home values, stabilize the housing market and create economic growth. It is expected to help as many as 400,000 borrowers that are in danger of losing their home to foreclosure.
Although the program begins October 1, 2008, if you are in danger of losing your home before that date, you should not wait to contact your loan servicer. You should begin applying for a federally insured mortgage now. The program ends September 30, 2011.
Through the U.S. Department of Housing and Urban Development (HUD) and the Federal Housing Administration (FHA), borrowers will be able to refinance into more affordable government-insured mortgages. If the homeowner sells the home in the future, the FHA will get a portion of any profits to recoup the government's investment over the long run.
Lenders will have to agree to an initial loss in profit to participate, but the lender's participation is completely voluntary. The program offers government insurance to lenders who agree to reduce mortgages for homeowners at risk of foreclosure to at least 90 percent of what the property is currently worth. You may wish to search for lenders in your area at the following link:
http://www.hud.gov/ll/code/llslcrit.cfm Or call HUD's National Servicing Center at 1-888-297-8685.
For those who still find themselves unable to afford the cost of owning their own home, the bill also includes provisions to increase the supply of affordable housing. For qualified first time buyers, who purchased a home after April 8, 2008 or will purchase a home before July 1, 2009, there is a refundable tax credit available. This credit is for 10 percent of the purchase price of the home, with a maximum available credit of $7,500 for either a single taxpayer or a married couple filing jointly. The credit is reduced or eliminated for higher-income taxpayers.
This tax credit works like an interest free loan that must be paid back over 15 years. Normally, it is repaid in 15 equal annual installments beginning with the second tax year after the year the credit is claimed. The repayment amount is included as an additional tax on the taxpayer's income tax return for that year. If you properly claim a $7,500 first-time homebuyer credit on your 2008 return, you will begin paying it back on your 2010 tax return. Normally, $500 will be due each year from 2010 to 2024. You may wish to view more information on this tax credit and exceptions to the repayment rule at:
http://www.irs.gov/newsroom/article/0,,id=186831,00.html
It also raises the loan limits for the FHA, Freddie Mac and Fannie Mae to $625,500 to enable more borrowers in high cost areas to qualify. For couples and individuals using the standard deduction, it provides couples with up to an additional $1,000 in deductions for property taxes and up to $500 for individuals. The states have also been granted $11 billion of additional tax-exempt bond authority in 2008 to be used to refinance subprime loans, make loans to first-time homebuyers and to finance the
building of affordable rental housing.
If you have questions, including how to qualify for this program, you should contact your local Housing Counseling Agency at:
http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm
We hope you find this information helpful.
Regards,
USA.gov Citizen Response Team
As you can plainly see, my specific question has not been answered, and HUD did not even mention the $300 billion allocated to help homeowners with mortgages originated between January 2005 and July 2007. More Lip Service – No Help!
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