Obama Administration Reveals New Stimulus for Housing/Mortgage

US Government to Provide Mortgage Financing for State Housing Agencies

Summary: The United States government on Monday revealed a new stimulus program, which is aimed to help the housing and mortgage sector of the states by mobilizing mortgage giants Fannie Mae and Freddie Mac in providing financing to small agencies that can't afford to make any more loans for first time homebuyers.

White House officials on Monday announced a new mortgage stimulus program of President Barack Obama that aims to provide support to local and state housing finance agencies, which will offer housing loans for first time homebuyers and further development of rental housing.

According to officials, the timing of the housing stimulus package could never be better as mortgage financing agencies of states are having a hard time raising funds due to the crisis in the housing sector and the wide effect of the credit crunch.

Based on records, the housing agencies of the states were only able to raise some $4billion in tax-exempted bonds, just one-fourth of the typical amount it can raise prior to the recession. The companies said that the very small amount of money they can raise has also limited the number of loan they can offer to buyers.

It was earlier mentioned the Obama administration has planned for mortgage giants Fannie Mae and Freddie Mac, both government backed, to help small financing agencies to push through despite credit crunch.
According to latest reports, the two mortgage giants will help by packaging mortgages made by the home loan agencies and sell them to the US Treasury Department as bonds.

“It will not really solve the problem of the housing market but it will help a little bit by giving assistance to loaners who are looking for best possible options especially during the time when credit is scarce,” Washington mortgage industry consultant Howard Glaser said.

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Obama Administration Reveals New Stimulus for Housing/Mortgage

US Government to Provide Mortgage Financing for State Housing Agencies

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