Bill approved by the House of Representatives

2008-07-25 04:11:42 (GMT) (WiredPRNews.com - Business, Real Estate)

Dallas, Texas (WiredPRNews.com) — A bill which authorizes an expansion worth $300 billion of loan guarantee programs by Federal Housing Administration and gives an additional leeway to Treasury Department for buying the debts of Freddie Mac and Fannie Mae has been headed to the Senate with the Bush administration lifting the risk to veto this bill.
HR 3221, the sweeping bill for Housing has been approved by the House of Representatives in a 152-272 vote held on Wednesday who have agreed to compromise with the Senate which preserves some of the provisional loan limits increase for Freddie, Fannie and FHA. The House had previously passed a legislation, which would have retained the loan limit conforming up to $729,750 in the high-cost areas, and now it has gone along the cap of Senate of $625,500.
The Bush administration and the Congress have agreed to temporarily increase the limits for helping the home buyers who require jumbo loans at affordable rates. The increase that became effective during March will expire by the end of this year.
The Bill has set conforming loan limits for Freddie and Fannie and upper limits for FHA program at 115% of median prices of homes in the local area up to $625,500. in order to stem the foreclosures, the bill will also allow the FHA to give an added $300 billion on mortgages for helping the troubled borrowers in refinancing into affordable mortgages as the lenders will agree upon writing off part of their loan’s principal amount.
For precluding a speculators’ bailout, only the homes occupied by the owners will be eligible to the program and the borrowers who afterwards sell their properties at a profit will need to share the gain amount with government. According to the estimates of the Congressional Budget Office, the government assistance for Freddie and Fannie may cost around $25 billion during the next couple of years, although there are more chances that a bailout will not be needed.

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