The Housing and Economic Recovery Act (HERA)
passed by Congress in July 2008The Neighborhood Stabilization Program (NSP) - THDA received an allocation of $49 million in NSP funds to be made available to local governments and non-profit organizations working in areas of greatest need. The purpose of NSP is to provide emergency assistance to state and local governments to acquire and redevelop foreclosed properties that might otherwise become sources of abandonment and blight within their communities.
Low Income Housing Tax Credit - Increased the amount of tax credits available to be allocated to state allocating agencies. In Tennessee, this amounts to 10% in additional available credits.
Homeownership - The tax-exempt volume cap allocated to Tennessee for low- to moderate-income housing was increased by $200 million. The authority can be used for single family mortgages or the Multi-Family Bond Authority Program for rental housing production.
Great Save Program - THDA received permission to offer a refinance loan to borrowers of low- and moderate-income who have an adjustable rate mortgage loan on their principal residence that was made after December 31, 2001, and before January 1, 2008, and that, as determined by THDA, would be reasonably likely to cause a financial hardship to the borrower if not refinanced. Homebuyer counseling is required. All loans are 30-year fixed rate loans, at the same interest rate as THDA's Great Rate program. Program expires on December 31, 2010.
HERA provides for a $7,500 income tax credit for the purchase of a single-family home used as a primary residence by a first-time homebuyer. This credit must be repaid to the IRS over a period of 15 years. Available for home purchases made on or after April 9, 2008. This credit is not available with a THDA loan.
Foreclosure Prevention - On February 18, 2009, President Obama announced a comprehensive plan to help responsible homeowners avoid foreclosure by providing affordable and sustainable mortgage loans. The Homeowner Affordability and Stability Plan provides for a sweeping loan modification program targeted at borrowers who are at risk of foreclosure because their incomes are not sufficient to make their mortgage payments. It also includes refinance opportunities for borrowers who are current on their mortgage payments but have been unable to refinance because their homes have decreased in value.
Additionally, THDA has developed a Foreclosure Prevention Initiative. It is working with partners to achieve several goals: public awareness, training for counselors, and capacity building for counselors. Counseling is free to consumers. Contact one of the certified counselors for more information.