The president has just signed the Federal Housing and recovery Act of 2008. Legislation that will overhaul the Depression-era FHA and provide mortgage relief for 400,000 homeowners struggling with foreclosure woes.

This bill is also designed to quiet the jitters on Wall Street by offering some financial relief and additional accountability for the troubled, government-sponsored mortgage companies Fannie Mae and Freddie Mac.

While the bill started with a battle between the White House and the Democrats in Congress, bi-partisan support eventually led the President to withdraw his veto threat. Below are some highlights of this far reaching legislation.

Homeowner Relief Measures

The law creates a new program to back FHA-Insured mortgages for debt-laden homeowners. Up to $300 billion will be available through the voluntary program operated by a board consisting of the HUD and treasury secretaries, and a chairman of the Federal Reserve Board and the Federal Deposit Insurance Corporation. (FDIC)

In exchange for new mortgages, homeowners will share future appreciation with the FHA. Borrowers must also meet a payment burden test to determine if they can afford a new mortgage.

Banks must agree to relinquish their claims for a payment equal to 85% of the current value of the home.

The homeowner relief program begins Oct. 1st 2008 and ends on Sept. 30th 2011. Read the rest of this entry »

Related posts

• Affordable Apartments for Rent in the Salt Lake Valley
• Basic Principles For Designing Your Dream House
• What Makes Modular Housing Affordable Housing?
• Affordable and Applicable Home Improvement Tips
• How Can a Housing Authority Streamline Its Processes?