Senate Passes Housing Bill – Does it Help the Daytona Beach Real Estate Market?
The Senate passing the housing bill can only do good things for the Daytona Beach Housing and Condo market. The benefit are two fold:
- Fewer homes will come on to the market
- Positive news
The housing bill today that will go into affect on October 1st. First let’s look at what the bill does:
Who Is Eligible?
- Must live in the home
- Good for loans issued from January 2005 through June 2007.
- Must be spending at 31% or more of gross monthly income on mortgage payments
- Up to date on their mortgage or in default
- Borrowers must prove they can’t pay their existing mortgage
- Borrowers must attest they are not defaulting to obtain lower payments
Any second mortgage, home equity line of credit or any other debt other than the primary mortgage must be eliminated before a homeowner might get an FHA backed loan.
- Borrowers cannot get another home equity loans for 5 years (with some exceptions)
- Borrowers will pay a 3.0% origination fee that can be put into the monthly payments
- Borrowers pay insurace of 1.5% of the mortgage principle – that’s $250/month on a $200,000 loan
- Borrowers pay a 3.0% exit fee to the FHA when they sell or refinance the home
- Borrowers are in partnership with the US Government. 100% of the profit of the sale goes to the FHA if you sell within a year, 90% after one year, down to 50% after fives years. Then it stops. The borrower will pay at least 50% of profit to the FHA when sold.
This is a voluntary program for lenders. That means that not all will participate and they will be selective. You will probably need to contact them to discuss possibilities and options.
For more information go to How Housing Rescue Bill Can Help You at money.cnn.com.
Benefit to Daytona Beach Market
Now back to the benefits for our Market. We have no idea how many people will be able to save their homes. I hope it’s significant and home owners in our area can benefit. Any homes that are saved are good for those people and our market. Fewer homes on the market reduces the excess we currently suffer (over 6,000 homes and condos).
Second, I feel for those who are genuinely suffering from the economic issues and housing crisis. To those who have lost their homes, this is too little to late. To those who are still in a position to save their homes, this is good news. For the rest of us, it is an island of good news in a sea of bad news. I can only help perceptions and contribute to the healing of the housing market.
So, overall, we don’t know the impact and won’t know for some time, but, it is a positive action by congress. President Bush has removed his veto threat and the bill should be signed into law this coming week.