Stimulus Plan Will Help Housing Market
The [tag]economic stimulus plan[/tag] recently announced Congress and the White House includes provisions that specifically address the mortgage crisis. It aims to make getting a mortgage easier and cheaper in high-cost markets, to facilitate [tag]refinancing[/tag] and to [tag]prevent foreclosure[/tag]s.
The package proposes lifting the dollar amount of loans that are eligible for purchase by Freddie Mac and Fannie Mae which currently guarantee a secondary market for loans of less than $417,000. The stimulus package proposes raising that cap to $625,000 for twelve months in order to make it easier for buyers to get or refinance mortgages – especially in high-cost locales like Manhattan and South Florida.
The National Association of Realtors recently projected that a higher loan limit, which the organization and other industry trade groups have been lobbying for, would boost home sales by nearly 350,000 a year. It would also reduce the average period of time a home sits on the market by a month and a half, and lift prices by two or three percentage points.