FHA changes make housing bill a ‘mixed bag’

President Bush signed historic legislation today that props up mortgage financers Fannie Mae and Freddie Mac and authorizes a $300 billion expansion of Federal Housing Administration loan guarantee programs. But the sweeping housing bill, HR 3221, inevitably has its critics -- including Housing Secretary Steve Preston, who's unhappy that Congress has placed a one-year moratorium on the use of "risk based" premium pricing for FHA loan guarantees. Home builders are also bracing for the elimination of seller-funded down payment assistance with FHA-guaranteed loans beginning Oct. 1. Others in the housing industry are lamenting that a $7,500 tax credit for first-time homebuyers that will expire July 1, 2009, must be repaid over 15 years -- making it, in effect, an interest free loan. The National Association of Home Builders and other industry groups are nevertheless working to publicize the tax credit to consumers, with NAHB rolling out a dedicated Web site, Federa...