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HR 3221, Housing and Economic Recovery Act
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We have received numerous questions about the Housing and Economic Recovery Act and what it means for Colorado. A quick summary of the bill follows:
- $11 billion Private Activity Bond (PAB) allocation, to help meet the increased demand for long-term, fixed rate mortgage finance and refinance loans for low and moderate income homebuyers and to serve as a resource for the development of affordable rental housing. Colorado’s Share: $152 million
These funds work like Colorado's existing PAB dollars, but be targeted to housing only. For home mortgages, the PAB is available to serve a broader audience—including families facing repricing of ARMs.
- 20-cent per capita Low Income Housing Tax Credit cap increase to support the creation and rehabilitation of affordable rental housing, which is becoming more expensive given escalating construction, land, and energy costs; as well as funding gap challenges resulting from changes in the tax credit marketplace. Colorado’s Share: $1.97 million additional tax-credit cap between 2008 and 2009.
The 2008 funds were allocated as part of CHFA's third round of tax credit allocations, held in August 2008. The special allocation went to two projects, both serving special populations. Information can be found on our tax credit allocation summary.
- $3.92 billion in grants to assist the state and local governments in stabilizing neighborhoods negatively impacted by foreclosure. Funds must be used within 18 months of receipt. Colorado’s Share: $53 million, which is divided as follows:
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ADAMS
COUNTY
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$4,600,211
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AURORA
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$4,474,097
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COLORADO SPRINGS
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$3,904,989
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DENVER
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$6,060,170
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STATE of COLORADO
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$34 million
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Housing Trust Fund to increase and preserve the supply of rental housing for extremely low and very low-income families, including homeless families; and to increase homeownership for extremely low and very low-income families.
- Changes FHA programs to allow more single family borrowers access to safe and secure mortgages - permits FHA to insure certain credit worthy refinances. CHFA is working closely with FHA to understand the requirements and timing of this insurance program. Please check this site for updates.
- Creates a $7500 tax credit for first-time homebuyers. Please check with your tax advisor for details on the credit.
Links and Related Information
As part of the 2008 Housing and Economic Recovery Act passed this summer, many borrowers now have the option of asking their lenders to consider restructuring the debt owed on their homes.
Fortunately, all CHFA borrowers receive fixed-rate fully amortizing mortgages preceded by our required free homebuyer education. Additionally, we service all of our loans in-house, and to ensure we do everything we can to help our borrowers be successful, we have an excellent loan servicing staff, well versed in options available to borrowers who may have had life changes making it difficult for them to make payments.
This safe and secure structure means we are not offering the Hope for Homeowners product to our borrowers. If you are having difficulties paying your mortgage, please talk to our loss mitigation team in Servicing.
Links“Tax Credit to Aid First-Time Homebuyers; Must Be Repaid Over 15 Years”
Source: Internal Revenue Service, Sept. 16, 2008
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| Western Slope Office - 1.800.877.8450 |
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