News

07/30/08

President Signs Housing Bill
Bill aims to provide mortgage relief for 400,000 struggling homeowners and stabilize financial markets; NeighborWorks America to administer $180 million for pre-foreclosure counseling

President Bush on July 30 signed into law the American Housing Rescue and Foreclosure Prevention Act of 2008, an extensive housing bill that aims to shore up the struggling housing market and reinforce mortgage finance giants Fannie Mae and Freddie Mac.

The bill would provide $180 million for pre-foreclosure counseling, to be distributed in grants by NeighborWorks America — with 15 percent targeted for low-income and minority homeowners and neighborhoods. This amount includes $30 million in grants for legal counseling to assist homeowners in foreclosure.

The legislation also provides the following:

$3.92 billion in emergency assistance (CDBG Funds) to communities hardest hit by the foreclosure and subprime crisis to purchase foreclosed homes, at a discount, and rehabilitate or redevelop the homes to stabilize neighborhoods and stem the significant losses in home values of neighboring homes.

Foreclosed and rehabilitated homes would be sold or rented to moderate-income individuals and families — whose incomes do not exceed 120 percent of the area median income. At least 25 percent of the funds would be targeted to house low-income and very low-income persons and families — whose incomes do not exceed 50 percent of area median income.

Any profit from the sale, rental, rehabilitation or redevelopment of these properties must be reinvested in affordable housing and neighborhood stabilization.

$15 billion in tax incentives, including tax credits for first-time homebuyers and an increase in federal low-income housing tax credits for development of affordable housing projects.

Provides for affordable housing programs, which includes the creation of a permanent Housing Trust Fund to increase and preserve the supply of rental housing and homeownership opportunities for extremely low and very low income families.

For more details on the housing bill, see:

Senate News Release

Bill Summary

CBS News Article