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Congress Bill Will Help Homeowners

August 22, 2008

By MoneyRates Team | Money Rates Columnist

A lot of media attention has been directed to the new legislation aimed at supporting the mortgage heavyweights Freddie Mac and Fannie Mae. While the cost of the bill to the US taxpayer has been hotly debated, the other parts of the bill aimed at the individual homeowner have been largely ignored. The bill which passed the House of Representatives 272-152 and the Senate 72-13 before being signed by President Bush contains the following items which could aid homeowners:

  • Increases the size of mortgages Fannie Mae and Freddie Mac can buy up to 115% of the local median price to a cap of $625,000
  • Provides up to $7,500 in tax credits for first-time homebuyers with additional tax benefits
  • Helps qualified homeowners refinance existing mortgages with better terms
  • $4 billion in aid pledged to depressed neighborhoods

The most important part of the bill is the unprecedented power that the Treasury Department has to inject capital into Freddie Mac and Fannie Mae to ensure the viability of the US housing market.

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