Finally, a Real Housing Stimulus

The bill authorizes $300 billion worth of FHA loans to help troubled homeowners work with lenders to refinance into more affordable FHA financing.

September 1, 2008

I’ve seen a number of commentaries on just what effect the Housing and Economic Recovery Act of 2008 will have on our nation’s housing markets. Let me say frankly that I believe this new housing stimulus bill, signed by President Bush on July 30, is one of the most important pieces of legislation we’ll see enacted in our lifetime. Its passage is a major victory for REALTORS®, consumers, and our nation—and you helped make it happen!

Thanks to your advocacy:

We’ve helped ensure the health of the secondary mortgage market agencies. Fannie Mae and Freddie Mac play a crucial role in bringing a steady supply of mortgage capital to homebuyers. As NATIONAL ASSOCIATION OF REALTORS® Chief Economist Lawrence Yun explains this month in his column, the new law uses the power of the federal government to help shore up investor confidence in Fannie and Freddie, which together hold or guarantee about $5 trillion worth of mortgages. The law also strengthens oversight of the two companies through a new, independent regulator.

We’ve given current homeowners and future homebuyers access to more affordable financing. The bill authorizes $300 billion worth of FHA loans to help troubled homeowners work with lenders to refinance into more affordable FHA financing. The bill also expands both FHA and conventional lending by making permanent an increase in loan limits. The increase will help move-up buyers and buyers in high-cost areas avoid expensive jumbo loans.

We’ve created an immediate stimulus to homebuying. As has been widely reported, the new $7,500 tax credit for first-time buyers is really an interest-free loan. Even though it’s not an outright credit, it’s an excellent low-cost way for the government to help bring qualified buyers into the market.

We’ve funded local revitalization efforts. The bill provides $4 billion in Community Development Block Grant funds for communities to purchase and fix up foreclosed homes.

Many of the law’s stimulus measures are temporary, designed to boost the housing market over the next 12 months, so be sure to read the law’s provisions carefully so that you can help your clients and customers take advantage of them.

We couldn’t have accomplished this victory without the wide-reaching and sustained efforts of REALTORS® around the country. And your support remains critical. Here are two ways you can help keep The Voice for Real Estate® strong:

1. Join the RPAC team. Give to the REALTORS® Political Action Committee today. All contributions are shared with state and local associations, so you’re represented at all levels of government.

2. Answer the call. When you receive an e-mail from NAR asking you to send an e-mail or make a phone call on a legislative or regulatory priority, please take the time to participate.

Thank you! I know that by continuing to work “All Together,” we’ll increase our mutual success for many years to come.