In an effort to soothe a struggling housing market, Congress has taken yet another step to help homeowners and businesses weather the tough times they may be facing.
The most intriguing part of the Foreclosure Prevention Act is not for homeowners, but for home buyers – the bill proposes a $7,000 tax credit for people who buy foreclosed properties. It also includes $4 billion in grants for communities to buy and fix up abandoned houses.
For real estate investors like Jim Woodworth from Bloomfield Hills, Michigan, the proposed tax credit gives even more incentive to purchase foreclosures. Jim currently invests in Detroit, where great real estate deals can be found on nearly every street. “Yes, the market may be down now, but history has shown real estate is a sound investment over time,” said Woodworth.
“If you have long term goals and a ‘buy and hold’ strategy, opportunities are endless with many desperate sellers looking to cash in quickly. This new bill will allow me to continue to invest in fixing up Detroit – house by house.”
In addressing other housing issues, Congress has recognized the bill needs to do more for homeowners facing foreclosure. Currently, one portion of the Foreclosure Prevention Act dedicated to struggling homeowners is $150 billion for pre-foreclosure counseling and stronger loan disclosure guidelines. It also calls for new FHA measures, which would allow more homeowners to refinance into the government-backed FHA loans.
HR 3221 also includes funding in the form of tax breaks for home builders and other businesses which are facing losses as a result of the down economy.
Although it has been passed by both the House and the Senate, the bill will likely see several more changes to address current homeowners who may be facing foreclosure. There are several other proposed plans which could be meshed into the Foreclosure Prevention Act before it reaches the President for signing.