2022 Boise Idaho Real Estate Blog

The New Housing Bill Broken Down

Main Boise Home Loans

HR 3221 makes some big changes to the way the mortgage industry works and operates. I have summarized some of the main changes and provisions in this blog.

OK…it has taken me a while, but I have finally waded through all 793 pages of HR 3221, more commonly known as the Housing and Economic Recovery Act of 2008. Here is a summary of the most important (in my humble opinion) provisions of HR 3221:


The minimum cash investment to a loan transaction will increase to 3.5% (from 3.0%). The Mortgage Insurance Premium for an FHA transaction could increase from 2.25% all the way to 3%...very expensive! Also, Seller Funded Down Payment Assistance programs (ex: Nehemiah) will not be available after September 30.


A first-time buyer is someone who has not owned a home in the past three years. First-time buyers that purchase a home between April 9, 2008 and July 1, 2009, can take a tax credit of up to $7,500. The tax credit is really an interest-free loan that is paid back over fifteen years in increments of $500 a year. There are income restrictions to this tax credit where it will phase out for higher income levels.


This bill attempts to help homeowners who are currently upside down on their homes and owe more than their homes are now worth. The mortgage must have been originated prior to January 1, 2008. Borrowers must certify that they did not intentionally default (jail time if found to be untrue).

If all above are true, the homeowner may be allowed to refinance into a mortgage at no more than 90% of appraised value. The current lien holder must agree to write down their mortgage to this level. At this point, the lien holder who is writing down the mortgage, will be allowed to recapture a portion of the home’s profit if it is sold within a certain time period.


SAFE Mortgage Licensing Act was created to “encourage” a nationwide licensing and registry system. There will be a National Registry of Mortgage Lenders (Idaho is already participating) for all states. Continuing education and a state licensing program will be implemented.

There are many more details in this law that I didn't go into detail on here. Iff you have additional questions about The Housing and Economic Recovery act of 2008, or are interested in talking about a mortgage or refinance for your home, feel free to call us.

Posted by Eric Leigh at 8/18/2008 10:29:00 PM

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