Monday May 12, 08:49 PM
Major provisions of housing rescue package
(AP) - Major provisions of a House-passed housing rescue bill aimed at heading off foreclosures and stabilizing the market.
--Give the Federal Housing Administration $300 billion in new lending authority and relax its standards
to provide affordable, fixed-rate mortgages to debt-ridden homeowners.
--Modernize the FHA and allow it to back loans for riskier borrowers. Permanently increase the size of loans the agency can insure -- currently set to revert to $362,790 by the end of the year -- to $729,750 in the highest-cost areas.
--Tighten regulation of Fannie Mae (NYSE: FNM - news) and Freddie Mac (NYSE: FRE - news) , the government-sponsored companies that finance mortgages, and permanently raise the limit on the loans they can buy -- set to revert to $417,000 by the end of the year -- to $729,750 in the highest-cost areas.
--Provide low-income housing tax breaks, low-income rental housing incentives and a credit of up to $7,500 for first-time homebuyers, to be paid back over 15 years.
--Give states $10 billion in tax-free municipal bond authority for low-interest loans to first-time homebuyers, construction of low-income rental housing, and refinancing subprime mortgages.
--Create a safe harbor from investor lawsuits for mortgage holders who modify loans to borrowers who are in default or about to default.
--Provide $210 million for pre-foreclosure counseling.
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