Rules for Loans Change on October 1, 2008

If you are thinking about buying a house in the next 12 months, you should really talk with a lender now. The new housing bill will have an impact on everything from down payment requirements to seller assistance. These are some things that will change on October 1, 2008 as I understand the bill:

  • The down payment requirement for an FHA loan will go from 3.0% to 3.5% of the purchase price.
  • For FHA loans, the seller will no longer be able to assist the buyer with the down payment through programs like AmeriDream and Nehemiah. (There are currently a lot of sales using these programs.)
  • Provides for a tax credit of up to $7500 for qualified home purchases between 4/9/08 and 6/30/08. This credit acts like an interest free loan in that it must be repaid over the next 15 years.

For more information: NAR Summary of Housing Bill Provisions

We recommend that you contact a lender to discuss the specific impact for your home loan and that you speak with an accountant for more information regarding the tax credit. We will also be happy to answer any questions that we can.