Welcome back to San Diego’s only weekly real estate update, where we bring you the latest housing trends and real estate news.
This week brings great news to the housing market. Fannie Mae has just rolled out an unprecedented Deed-For-Lease program to help troubled borrowers stay in their homes. The program aims at borrowers who don’t qualify for a loan modification, thus, giving them another option to getting kicked out of their home.
Here’s how the Deed-For-Lease program works. Troubled borrowers who can’t qualify for a loan modification will now be able to transfer the deed back to the lender and then sign a lease with them to stay in their home. Borrowers under the program must live in the home as their primary residence.
Fannie Mae is under government control, with its purpose being to guarantee mortgages so lenders can more freely lend money to homebuyers, assuming less risk. The new program is mainly aimed at troubled borrowers with Fannie Mae owned or guaranteed mortgages. The idea is to drastically reduce the spread of abandoned properties that have been foreclosed. Abandoned properties are rarely maintained and affect home values throughout the neighborhood. It also keeps people in their homes, and assures a steady income from the property. Under the program, even tenants of troubled homeowners may qualify for leases.
Not all homeowners may qualify. They must show they can pay market rent, however, that payment can’t be more than 31% of the troubled borrower’s pre-tax income.
Stabilizing the housing market, neighborhoods, and keeping a roof over people’s heads is at the heart of this groundbreaking new program. Hopefully, people will find out about it before it’s too late for them. There are so many government programs now helping people avoid foreclosure and stay in their homes.
Last week we spoke about the possible extension and expansion of the $8,000 Tax Credit program for first time homebuyers. President Obama has now officially signed the bill to extend the program through the end of June and has expanded it to include current homeowners who want to trade up to larger homes.
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