Housing Bill Could Become a Reality Soon

The bipartisan housing bill is picking up steam in Congress–and it could be voted on this week, possibly as early as tomorrow.

That’s amazingly fast, considering how long the housing slump has been going on–and it took just a few days to cobble this proposal together.

However, the bill may have been constructed quickly–but it’s more thorough than you might think.

Some highlights of the proposal, courtesy of CNNMoney.com:

• Revamping the FHA. FHA loan limits could increased from 95 percent of an area’s median home price to 110 percent, with a limit of $550,000
  in high-cost areas. Down payment requirements may also go from 3 percent to 3.5 percent.

• Giving Builders a Boost. Builders would be allowed to extend the time homebuilders can post 2008 and 2009 losses to past tax bills from two to four years, which could help offset the impact of the housing bust.

• Giving Homebuyers a Break. The bill contains a number of provisions to help encourage homebuying, which could be good news for the market, including a $7,000 credit for homebuyers who buy foreclosed homes or homes in default and an additional property tax break.

• Helping out Refis. Homeowners looking to refinance would also get help via the bill, which suggests opening up $10 billion in tax-free municipal bonds, with proceeds going toward paying for mortgage refinancing for troubled subprime borrowers.

• Making the Lending Process Better. In addition to $100 million for homeowner counseling to prevent foreclosures, the bill calls for more mortgage application disclosure to ensure consumers better understand what loan terms they’re agreeing to–and what exactly they will owe over time.

Builders are sure to benefit from the bill’s allowances, and its tax and buying breaks could help invigorate home sales–a desperately needed change.

There is, of course, no guarantee all the bill’s provisions will be accepted. The Bush administration has already focused in on the bill’s suggestions to offer $4 billion in state and local
government grants to buy and rework foreclosed properties and its suggestion to earmark $100 million for counseling, calling it a bailout for investors–a group which the government has said from the get-go won’t be helped by any housing aid plan.

But the bill’s attempt to attack multiple prongs of the housing crisis is admirable–the builders do need a break, as do buyers, as do communities with a high number of foreclosed properties.

Is the bipartisan bill the solution that the housing slump needs? Is it missing any necessary help–or does it contain any excessive measures? What do you think?

Tell us what you’d add or subtract from the bill by posting below.