Government closer to housing stimulus package

The government moved one step closer to trying to put a stop to the rapid deterioration of the U.S. housing markets. The house today passed the measure aimed at helping to end home foreclosures. The proposed legislations has three major components. First the bill is aimed at ensuring that Fannie Mae and Freddie Mac stay in business and have the financial ability to raise capital and borrow funds throught he Fed Discount window. The agency lenders will face more oversight, but are also given more assurances of their survival with the opportunity for the government to purchase stock to raise their capital levels if necessary.

There are two other major components to the bill. The establishment of a fund that would be approximately four billion dollars to help communities to buy foreclosed homes to either repair and sell or rent out. This is a good step towards helping to reduce the home inventory levels. The next component of the bill is also aimed at helping to reduce home inventories. The establishment of a tax rebate up to 7500 for first time home buyers.

The last major component of the legislation will help to provide the ability for the FHA to cover more refinance mortgages for home owners who have struggled to make their house payments This part enables FHA to be a leading driver in helping with home refinances for customers who otherwise would not qualify for a home mortgage.