In an effort to stem the tide of foreclosures in the United States, Federal and State governments created a host of programs designed to keep people in their homes and to spur the purchase of new residences. People interested in a buying a home today should avail themselves of these critical resources to support their efforts.
Homebuyer Tax Credit
Recently, the government extended the Homebuyer’s Tax Credit through April, allowing any person purchasing a home to get an $8,000 tax credit for doing so. Anyone considering a home should apply for this credit. Most realtors and mortgage brokers should be able to walk a borrower through this process and secure these funds.
Buyers should also inquire about similar programs being offered by a variety of states and agencies. Down payment assistance is often available for veterans, first time home buyers or low income home buyers. Start looking for these programs on the web, through a real estate agent or through a mortgage broker.
Deed-for-Lease Program
Homeowners currently in financial straits with loans owned by Fannie Mae or Freddie Mac should consider the Deed-for-Lease program. This program allows the homeowner to stay in their property and pay an affordable rent if they agree to a friendly foreclosure. While not the optimum situation for many borrowers, those that are in home severely underwater could use this program to rebuild their savings and remain in their home for up to a year or more.
This program is tough to qualify for, but should be a consideration for any homeowner facing foreclosure. This program affords the homeowner the ability to lower their monthly payments and prepare to move to another location. Under a foreclosure scenario, this same homeowner would have less time to move and no time to save for a down payment on a rental.
Low Interest Rate Mortgages
Few homeowners understand the reason for today’s unprecedented low interest rates. The government has been buying mortgages at such a high rate that interest rates are artificially low. When the government stops this process, borrowers can expect to see interest rates spike 1% or more almost immediately. While no one expects this to happen any time soon, borrowers should understand that low rates cannot persist forever. At some point the government will step back and interest rates will rise rapidly.
Consumers buying homes now can expect an unprecedented amount of government assistance. In addition to the programs listed above, many states provide assistance for homeowners looking to rehabilitate homes. Investors and homebuyers should make themselves aware of the programs and assistance available to them while it lasts.
Michael Cook - Michael Cook is currently a Real Estate Investment Banker for Wachovia. He and his partnerstarted their own real estate investment ...
