Housing components in economic stimulus package

It has become clear that the House of Representatives and Bush Administration view strenthening the housing market as key to improving the national economy. On January 24, the House along with Treasury Secretary Paulson on behalf of the Bush Administration announced an economic stimulus package with provisions that can help jump start the housing market and protect some current homeowners.

Currently being reported as part of the package includes:
· The FHA limit will increase permanently to as much as $729,750 in high cost areas (125% of local median home prices). The language is similar to the bill passed by the House before to the 2007 holiday break, including reducing downpayment requirements.
· The GSE limit is expected to be increased to up to $729,750 for one year. Currently Fannie Mae and Freddie Mac are capped at $417,000. It appears that there will be a formula similar to that of FHA, with GSE loan limits increasing to 125% of the local median home price, but not to exceed $729,750.

This could stimulate new-home sales, possibly reduce the amount of foreclosures, give families a safer alternative to many of the riskier mortgages of the past, and the opportunities for more families to purchase a home because of lower down payment loan options that will become available.

With McCall's median home price of $450,000 for homes currently listed, this could make high end homes and condos much more affordable to finance.