Senate passing housing relief bill but what does that mean for us?

On Saturday the Senate passed the most far-reaching bill on housing. Included in the bill is a rescue plan for Fannie Mae and Freddie Mac. The President says that he will sign the bill. The bill will essentially give those who qualify an opportunity to refinance their mortgage into a lower government-backed loan. To qualify, homeowners need to meet the following criteria:

Homeowners are currently living in their home and have loans issues between January 2005 and June 2007.

Homeowners must be spending at least 31% of their monthly income on their mortgage and prove that they cannot continue to pay their mortgage at the current rate. They must also prove that they are not deliberately defaulting to get a lower rate. This applies to homeowners up to date on their loan or in default.

All other debt, like home equity loans or lines of credit, must be retired on the home before being able to get a FHA-backed loan. Homeowners will not be able to get another home equity loan for five years unless it’s for necessary upkeep on their homes. At the time of getting a home equity loan, total debt on home cannot exceed 95% of total appraised value of the home.

To find lenders go to the Department of Housing and Urban Development website.