Bill's key provisions

  • July 23, 2008 - 11:00 PM


• Gives the Federal Housing Administration $300 billion in new lending authority and relaxes standards to provide affordable, fixed-rate mortgages to debt-ridden homeowners. Any losses would be covered by an affordable housing fund financed by Fannie Mae and Freddie Mac, the government-sponsored companies that finance mortgages. It could help at least 400,000 families avoid foreclosure.

• Creates an independent regulator to oversee Fannie and Freddie. Increases the limits on loans they can buy or guarantee from $417,000 to $625,500. Gives Treasury temporary authority to increase its line of credit to the mortgage giants and buy their stock.

• Provides $3.9 billion in grants to the hardest-hit communities for buying and fixing up foreclosed property.

• Modernizes the FHA and allows it to back loans for riskier borrowers. Increases the size of loans that the agency may insure -- currently set to revert to $362,790 by year's end -- to $625,000 in the highest-cost areas. The agency could buy loans 15 percent higher than the median home price in certain cities.

• Bars the FHA from insuring mortgages in which the borrower's down payment is paid by the seller, beginning Oct. 1. Places a one-year moratorium to bar the agency from charging premiums based on the riskiness of the homeowner, until Oct. 1, 2009.

• Provides $15 billion in tax benefits. Lets people who don't itemize their taxes claim a $500-$1,000 deduction on their 2008 property taxes.

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