President Bush on July 30, 2008, signed into law HR-3221, a sweeping housing bill that aims to boost the struggling housing market and bolster mortgage finance giants Fannie Mae and Freddie Mac.
The legislation provides $180 million for pre-foreclosure counseling, to be distributed in grants by the Neighborhood Reinvestment Corporation (NeighborWorks America) – with 15 percent targeted for low-income and minority homeowners and neighborhoods, and $30 million in grants for legal counseling to assist homeowners in foreclosure. See NeighborWorks America statement on housing legislation.
The legislation also:
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Transfers regulatory responsibility for loans originated or held by Fannie Mae and Freddie Mac (government sponsored enterprises, or GSEs) from HUD to a new regulator, the Federal Housing Finance Agency (FHFA).
- Provides $3.92 billion in emergency assistance (CDBG Funds) to communities hardest hit by the foreclosure and subprime crisis to purchase foreclosed homes, at a discount, and rehabilitate or redevelop the homes to stabilize neighborhoods and stem the significant losses in home values of neighboring homes.
- Provides that foreclosed and rehabilitated homes would be sold or rented to moderate-income individuals and families — whose incomes do not exceed 120 percent of the area median income. At least 25 percent of the funds would be targeted to house low-income and very low-income persons and families — whose incomes do not exceed 50 percent of area median income.
- Provides that any profit from the sale, rental, rehabilitation or redevelopment of these properties must be reinvested in affordable housing and neighborhood stabilization.
- Provides $15 billion in tax incentives, including tax credits for first-time homebuyers and an increase in federal low-income housing tax credits for development of affordable housing projects.
- Provides for affordable housing programs, which includes the creation of a permanent Housing Trust Fund to increase and preserve the supply of rental housing and homeownership opportunities for extremely low and very low income families.
For more details on the housing bill, see Senate news release.
New Developments:
