Obama’s recovery plan to assist home buyers and home owners

February 15, 2009 at 6:54 am Leave a comment

The National Association of Realtors (NAR) on Saturday, Feb. 14, reported the following changes in the housing stimulus package of President Obama’s economic recovery plan:

1) Loan limits will be raised to $727,000 in high-cost areas
2) The first-time home buyers tax credit will be raised from $7,500 to $8,000 with NO payback (a true credit).
3) Interest rates have come down 125-150 basis points
4) The bill has over $50 billion in it for foreclosure mitigation, with Geitner’s Treasury plan signaling that the second half of TARP and TALF will be used to mitigate foreclosures through a government guarantee, drive down interest rates by buying another $200- to $300 billion of mortgage paper from the GSES’s, thereby freeing them up to do the same with new mortgages, and Fannie Mae has just agreed to lift the cap of 4 investment properties eligible for loans and raise it to 10.

These changes will help stimulate more buying of homes. But the real test will come with how the Obama administration will stop the foreclosures. If people can keep their homes, foreclosures will be contained and home values will stabilize. At the same time, interest rates should stay at the low 5 percent range (or lower) to increase sales. If the foreclosure trend decreases and the buying trend increases, supply and demand will balance out, making way for a stable housing market that will ultimately be the leading contributor to a stable economy.

Entry filed under: Arizona Real Estate, Chandler Real Estate, Foreclosures & Short Sales, Phoenix Real Estate, Real Estate Deals.

Realtor Helps FSBO in a Buyer’s Market Obama Housing Plan Question and Answer

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