| Here are some of the details from the new housing bill: | | | | appraisers. |
| The President has signed into law legislation that will | | | | HUD, Treasury, FDIC and the Federal Reserve will |
| allow HUD's Federal Housing Administration (FHA) to | | | | form the Congressionally-mandated Board of Directors |
| continue providing targeted mortgage assistance to | | | | and work together to establish additional program |
| homeowners. The Hope for Homeowners program will | | | | standards. |
| continue FHA's existing and successful efforts to | | | | Voluntary Lender Participation |
| provide aid to struggling families trapped in mortgages | | | | FHA will continue to offer lenders an alternative to |
| they currently cannot afford. Under the program, | | | | foreclosing on borrowers. Similar to FHASecure's |
| certain borrowers facing difficulty with their mortgage | | | | recent expansion, lenders will be encouraged to |
| will be eligible to refinance into FHA-insured mortgages | | | | write-down the outstanding mortgage principal |
| they can afford. The program will be implemented on | | | | balances to 90 percent of the new value of the |
| October 1, 2008. | | | | property. In many cases, reductions in principle will cost |
| Sustainable, Affordability Homeownership | | | | lenders less than the losses associated with |
| Hope for Homeowners maintains FHA's long-standing | | | | foreclosure. |
| requirement that new loans be based on a family's | | | | Market Stability and Liquidity |
| long-term ability to repay the mortgage. FHA only | | | | By continuing to slow the rate of foreclosures, this |
| allows owner-occupants to be eligible for FHA-insured | | | | program will support FHA's existing effort to stabilize |
| mortgages. Borrowers must also meet the following | | | | local housing markets. From September 2007 to June |
| eligibility criteria: | | | | 2008, FHA has guaranteed more than $93 billion of |
| * Their mortgage must have originated on or before | | | | mortgage capital. |
| January 1, 2008; | | | | Funding |
| * Their mortgage debt-to-income must be at least 31 | | | | FHA will insure up to $300 billion in new loans. |
| percent; | | | | Borrowers will pay an upfront premium of 3 percent of |
| * They cannot afford their current loan; | | | | the original mortgage amount and an annual premium |
| * They did not intentionally miss mortgage payments; | | | | of 1.5 percent of the outstanding mortgage amount. |
| and | | | | Any additional costs incurred by FHA will be |
| * They do not own second homes. | | | | reimbursed by Fannie Mae and Freddie Mac. |
| Features of FHA-insured loans under the new | | | | Program Timeline |
| program include: | | | | The program will last from October 1, 2008 through |
| * 30-year, fixed rate mortgage; | | | | September 30, 2011. Since September 2007, |
| * Maximum 90 percent loan-to-value ratio; | | | | FHASecure has helped more than 290,000 families |
| * No prepayment penalties; | | | | obtain safer, more affordable mortgages. FHASecure |
| * $550,440 maximum mortgage amount; | | | | is on pace to help 500,000 families by the end of the |
| * Extinguishment of any subordinate liens; and | | | | year. |
| * New home appraisals from FHA-approved | | | | |