Making Home Affordable Program Rolled Out April 4th, Expect Changes May 4th '09
On February 18, 2009, President Obama announced his Making Home Affordable Program, designed to help up to 7-9 million families avoid foreclosure by restructuring or refinancing their mortgages. In doing so, the plan not only helps responsible homeowners behind on their payments or at risk of defaulting, but prevents neighborhoods and communities from being pulled over the edge too, as defaults and foreclosures contribute to falling home values, failing local businesses, and lost jobs.
For more detailed information, visit MakingHomeAffordable.gov.
This measure aims to help borrowers, bolster the housing market and provide a way out for Fannie & Freddie
With a permanent conforming loan limit, the law will permanently increase the cap on the size of mortgages guaranteed by FNMA (Fannie Mae) & FHLMC (Freddie Mac) to a maximum of $625,500 from $417K. The FHA maximum loan limits for high-cost areas would also increase to a maximum of $625,500. Higher loan limits will make it easier for borrowers to get mortgages, because those mortgages are more likely to be traded if they are considered conforming.
Another law provides includes a tax refund which is actually a loan, for first-time home buyers worth up to 10% of a home's purchase price but no more than $8,000.
Now FHA borrowers will be required to pay 3.5% down compared to 3% in the past.
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