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Impact of HR 3221 on Santa Clarita Real Estate |
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By Bob Boog.
 A lot of newspaper ink has been spilled lately over HR 3221 - the Housing and Economic Recovery Act - which was recently passed into law. This legislation could have significant implications for the Santa Clarita Valley housing and mortgage industries, so I wanted to point out a few things that could impact you or someone you know.
The main thing that may impact most first-time homebuyers is the elimination of what is called the “Nehemiah Program”. The Nehemiah Program is a down payment assistance program where a home seller contributes up to 6% of the selling price of a home to a non-profit agency called Nehemiah. For a fee of about $400, Nehemiah then provides the money as a legal down payment to a homebuyer. This popular FHA program has helped over 900,000 families obtain homeownership since 2000, however, it is unpopular with HUD because many of these homes eventually end up in foreclosure.
As this new Federal legislation is currently written, the Nehemiah program will be phased out of homes insured by HUD for homebuyers on or about October 1. There is currently some discussion as to when the exact date will take effect, but if you know someone who is in interested in using this program to buy a home, they should have their FHA loan application in process prior to October 1.
Another interesting piece that was included in this legislation is that first-time homebuyers will also have a window of opportunity to qualify for up to a $7,500 tax credit. The tax credit will be 10% of the purchase price of a home, up to a maximum of the full $7500 credit.
The tax credit will have to be paid back over a period of 15 years, so it amounts to giving first-time homebuyers a 15-year interest free loan to help them purchase their first home! Naturally, there are other qualifying factors involved, and the details are still being ironed out with the Internal Revenue Service.
The HR 3221 bill is 789 pages long and you can expect that there may also be wrinkles and possible disadvantages that I will be passing along to let you know how it may impact you in the future.
Till next month – happy house-hunting!
Bob Boog
Robert Boog
(661) 259-9723
(661) 259-9725 (fax)
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www.sellinghomes1-2-3.com
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