New Lending Changes to Get You Buying

Two new important changes have happened in the world of home loans. The first and best publicized is the new $8000 tax credit being offered to first tiime homebuyers. Unlike the current credit this one does not have to be paid back if you stay in the home for at least three years. This credit is for home purchases from January 1st till the end of November, 2009 and will give the full $8000 credit to any first time buyer earning up to $75,000 as an individual or up to $150,000 as a couple. However, you do not need to have paid income taxes to receive a credit. This is an improvement over last years attempt at a $7,500 "credit" that was actually a long term interest free loan from the government. The prior credit was a turnoff to many would be buyers because it felt like you were being forced into a situation where you owed the government money for the next 15 years.

The second change comes for investors who own more than four financed properties. As I wrote in my last entry currently both Fannie Mae and Freddie Mac have reduced the number of financed properties a person can have all the way down to four. Although to some people this may sound like a lot of real estate there are tens of thousands of investors who have been taken out of the market at a time when we need well qualified buyers to buy as much of the inventory of available homes as possible. Now, recent changes in these guidelines once again will put the number back up to ten allowing these buyers the chance to buy up the over abundant inventory of homes and help stabilize the market. I would argue that theses people are exactly the kind of people who should be able to take advantage of this market. These are the buy and hold landlords who keep property forever and whose job it is to provide quality housing to tenants. Bravo to Fannie and Frddie for seeing it MY way.

If you've been reading my prior posts you know there are still a couple of imortant changes that need to happen (ie, Seller funded DPAs via HR 600 and the reintroduction of Stated Income loans done the old fashoined way) but these are definitely two important steps in the right direction.