housing bills

housing bills

Key provisions

Comparison of major elements of housing relief bills in the Senate and House. They would:

Give the Federal Housing Administration $300 billion in new lending authority and relax standards to provide affordable, fixed-rate mortgages to debt-ridden home owners. Any losses would be covered by an affordable housing fund drawn from the profits of Fannie Mae and Freddie Mac, the government-sponsored companies that finance mortgages. Under the House bill, taxpayers ultimately are responsible for losses.

Modernize the FHA and allow it to back loans for riskier borrowers. Permanently increase the size of loans the agency may insure — currently set to revert to $362,790 by the end of the year — to $625,000 in the highest-cost areas. The House-passed bill would set the limit at $729,750.

Bar the FHA from insuring mortgages in which the borrower’s down payment is paid by the seller and prohibit the agency from charging premiums based on the riskiness of the homeowner. The House-passed bill allows loans with seller-funded down-payment assistance and includes risk-based pricing.

Provide low-income housing tax breaks and a credit of up to $8,000 for first-time home buyers who purchase residences between April 9, 2008, and April 1, 2009. The $14.5 billion plan is only partly paid for, costing $2.4 billion. The House version includes a first-time home buyer tax credit of $7,500 and is fully paid for.

Give states an additional $10 billion in tax-free municipal bond authority for low-interest loans to first-time home buyers, construction of low-income rental housing and refinancing subprime mortgages.

Provide $180 million for pre-foreclosure counseling and legal services for distressed borrowers. The House-passed measure provides $210 million for counseling.

Provide $3.9 billion in grants to the hardest-hit communities for buying and fixing up foreclosed property. A separate House-passed bill provides $15 billion in loans and grants for this purpose.

Source: Associated Press