Helping Families Save Their Homes Act 2009

On May 20, President Obama signed the Helping Families Save Their Homes Act (S. 896) into law. As detailed in a White House summary, the law modifies the Hope for Homeowners (H4H) program to make it usable by more borrowers, facilitates the modification of FHA loans and Rural Housing Service guaranteed loans, and extends the temporary increase in maximum FDIC-insured deposit amount ($250,000) and credit union insured accounts. In addition, it authorizes appropriations of $60 million a year in FY2010 and FY2011 for housing counseling and outreach to prevent mortgage rescue scams. It also includes protections for renters in foreclosed properties, including Section 8 tenants, through December 31, 2012, by requiring at least a 90 day notice to vacate and honoring existing leases. One provision gives states some flexibility to use Neighborhood Stabilization Program (NSP) funds outside targeted areas.

The Housing and Economic Recovery Act of 2008 

On July 30, 2008, the President signed the Housing and Economic Recovery Act of 2008 into law (H.R. 3221, now Public Law 110-289).   As detailed in a CHAPA summary, the wide-ranging bill includes many affordable housing provisions and authorizes:

• A new Affordable Housing Trust which will provide grants to states and localities starting in 2010, primarily for rental housing programs for extremely low income households.  The Trust will be funded through assessments on Fannie Mae and Freddie Mac.  Assessments will also fund a new Capital Magnet Fund which can be used for both affordable housing and related community facilities and economic development activities.
  
• A new FHA insurance program (HOPE for Homeowners) for refinance mortgages for homeowners with currently unaffordable mortgages (starts October 1).
  
• A $3.92 billion grant program for states and localities to address foreclosed properties.
  
• $180 million in additional foreclosure counseling funds.
  
• A new regulator for Fannie Mae, Freddie Mac, and the Federal Home Loan Banks, and new affordable housing goals for each.
  
• Temporary increases in LIHTC and tax-exempt bond allocations to states (20 cents a year per-capita for LIHTC in 2008 and 2009 and $11 billion nationwide for tax-exempt bonds in 2008).
  
• Revised rules for a number of HUD programs, including LIHTC, tax-exempt bonds, Section 8 Project Based Vouchers and Shelter Plus Care.
  
• A temporary tax credit for first time homebuyers.
  
• New mortgage disclosure and loan originator licensing and registration requirements.

Emergency Economic Stabilization Act of 2008” (EESA) – H.R. 1424
Summary of Foreclosure-Related Provisions

Title I of the “bailout” bill (H.R. 1424), signed into law on October 3, creates a new Troubled Assets Recovery Program (TARP) under which the Treasury Department can purchase residential and commercial mortgages, mortgage backed securities and other mortgage-related assets originated or issued before March 14, 2008, as well as other assets as needed. 

Four sections include language related to foreclosure assistance and renter protections.  Three lay out steps the Treasury Department must take regarding the mortgage-type assets they acquire and that other federal agencies (FDIC, FHFA, FHA) must take in relation to any mortgage-type assets they own, requiring them to: (1) develop a plan to “maximize” assistance to owners; (2) encourage loan modifications that recognize owners’ for operating costs and that protect tenants with leases and/or rent subsidies; and (3) develop a coordinated plan to prevent foreclosures and encourage modifications.  The fourth provision modifies the new FHA HOPE for Homeowners program, expanding eligibility and allowing upfront payments to subordinate lienholders to facilitate loan modifications. The bill also creates a Congressional Oversight Panel that, among other things, must review the financial market regulatory system and recommend improvements by January 20, 2009 and requires the Treasury Department to do the same by April 30, 2009. 

For a full summary of all of the provisions, please click here.

*For more federal legislative updates, please visit CHAPA's Federal Housing Policies page.