Federal Programs To Aide Homeowners

The President and Congress have developed two programs to help combat the housing crisis and, hopefully, stave off additional foreclosure filings.

FIRST TIME HOME BUYER INCENTIVE PROGRAM:

First time home buyers are eligible for a tax credit of $8,000.00 for buying a home this year. This increased the credit from 2008 by $500.00. The benefit of the 2009 credit is that the homebuyer does not have to pay it back.

This credit is available to a single taxpayer who makes an annual income of up to $75,000.00. Married couples are eligible if their combined income is up to $150,000.00.

A first time home buyer is a person who has not owned a home in the past three years.

REFINANCING ASSISTANCE PROGRAM:

Back when the housing market was booming, many home buyers used adjustable rate mortgages or financed 100% or more of the purchase price to buy houses. Rates increased while the housing market began to decline, resulting in dropping property values and increased monthly payments. Now that rates have lowered, many of these individuals can’t take advantage of them.

Under normal circumstances, lenders require an 80% loan to value ratio to refinance. Under the program, Fannie Mae or Freddy Mac backed loans can qualify without the 80% ratio. Some loans may qualify with as much as a 105% loan to value ratio.

The goal is to obtain a maintainable monthly payment for homeowners. To qualify, whether a homeowner can afford the payments along with the taxes, insurance and association assessments will be considered. The hope is that this will help homeowners set (and keep) realistic budgets within which they can sustain themselves and make their payments.

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