Yesterday, President Obama signed the $787 billion American Recovery and Reinvestment Act (aka â€œthe stimulusâ€) into law. While it is the largest spending bill in America’s history, and no one in Congress had fully read it, the much talked about perk for first time home buyers did make it into the bill. Here is a recap of what the final plan means for first time home buyers:
This is a better deal than I originally thought it was. I didn’t think the $15,000 credit which was rumored would ever fly. If you have been thinking or even dreaming about making your first home purchase, we are now in the perfect storm: high inventory, depressed prices, low interest rates, and not an $8,000 credit with very few strings attached! (In case you may have forgotten, I make my living as a real estate broker here in Memphis, so contact me if you have questions)
Today President Obama will travel to Phoenix, one of the Ground Zero locations of the housing crisis, to unveil his plan for housing relief. Should be interesting!
If you don’t want to read this post, at least watch the second video! Billions of dollars to bail out the financial markets, which they use a significant portion of to pay out billions in bonuses to Wall Street fat cats, all the while tightening credit. Wasn’t the bailout’s purpose to loosen the financial markets and encourage lending to stimulate the economy? It seems that Wall Street’s and the banking industry’s mantra will always be Greed IS Good!
What the hell did they do with all that money they made repackaging worthless mortgages and charging userious rates on consumer credit for all those years? I didn’t intend to rant about this, and I already clipped and shared this video in my social media platforms, but this one really tells the story.
Inman News Service reports that the National Association of Realtors now endorses seller funded downpayment contributions, which were outlawed (effective October 1) by last summer’s housing bill. A new bill was immediately introduced to re-instate the the seller funded gifts. I have posted about this before, but basically, since the seller cannot legally pay the downpayment for a a buyer who can’t scrape together enough for the minimal FHA downpayment, the seller-funded scheme allows the seller to “contribute” to a “non-profit” company the downpayment plus a service fee. The “non-profit” company then “gifts” the money to the buyer. Sounds like the seller is giving the buyer the downpayment, plus the middle man is getting a little of the action too. If these programs were good for the housing market, or the economy, why didn’t the housing bill just let seller pay buyers’ downpayments directly? The new bill has some credit score guidelines and higher rates for higher credit risks, but bottom line is buyers are able to buy with no outlay of their own funds. It would cost more to rent an apartment, because, generally a deposit and a first month’s rent is required before possession.