The path to the American dream of owning your own home continues to change. The Housing & Economic Recovery Act of 2008 was signed this week and “the times they are a changing.

Here are the highlights of the changes. If you are considering buying or selling a home, contact Ginny (925) 699–3328 to see how this may affect your situation.

First-Time Home Buyer (FTHB) Tax Credit:

• The maximum credit amount is $7,500
• The credit is available for homes purchased on or after April 9, 2008 and before July 1, 2009
• Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit. There are specific modifications to these limits, best to seek advise of a tax preparer.

FHA Modernization:

• Effective October 1, 2008 the minimum down payment will increase to 3.5%, up from 3.0% currently
• Seller funded Down Payment Assistant Programs such as Nehemiah, HART and AmeriDream or funds from any other interested party to the transaction will be prohibited on all loans where final credit approval has not been established by September 30, 2008
• Effective January 1, 2009 the maximum FHA-insured loan will be increased to 115%  of an area’s median home price, up to a maximum of $625,500

Fannie Mae and Freddie Mac’s Conventional Conforming Loan Limits

• Effective January 1, 2009 the conforming loan amount will increase in high-cost areas to $625,500
• Loan limits defined in the Economic Stimulus Act of 2008 will remain effective until December 31, 2008.