$7500 Tax Credit for First-Time Homebuyers

There has been a lot of discussion about the Omnibus Housing Bill by a vote of 272 to 152.

Key bill provisions:

- Raises FHA required investment to 3.5 percent from current 3 percent
- Abolishes seller funded down payment assistance on FHA loans credit approved on or after October 15, 2008
- Abolishes FHA risk based pricing for case numbers ordered on or after October 15, 2008
- Streamlines FHA condo approval provisions
- Provides $7500 tax credit for first time homebuyers on homes purchased between April 9, 2008 and July 1, 2009
- New regulator for Fannie and Freddie with much broader authority
- FHA and Fannie/Freddie loan limit would change to lesser of 115% of median home price or $625,000 when the current temporary limits expire at the end of the calendar year. Fannie/Freddie floor would remain at $417,000 and FHA floor would remain at current floor.

The bill will go on to the Senate and should receive a vote this week where it would be anticipated for easy passage and go on to the President for signature. The President has lifted his threat of veto so it should become law in the next few days.

It should be noted that Speaker Nancy Pelosi, Financial Services Committee Chairman Barney Frank, and Financial Services Committee Member Maxine Waters said on the House floor today that they intend to introduce stand alone legislation to reinstate both the seller funded down payment assistance programs and the FHA risk based pricing in time to NOT have them stopped in October even though this bill does away with both.