An ambitious housing bill has been passed by legislation and is anticipated to be signed into law by President Bush soon. Included in the bill are provisions for those facing foreclosure, the first time home buyer, and help for the low income. This bill brings with it hope of relief from the tough economic times many are facing throughout the country.

The economy today has found many current homeowners facing foreclosure on their homes. When this bill is passed into law homeowners unable to make mortgage payments will be able to refinance their homes more affordably with fixed rate loans that are insured by the federal government. Up to $300 billion of loans will be able to be guaranteed by the FHA. According to the U.S. News and World Report this will be enough funds to modify approximately 400,000 mortgages. The downside to this is that lenders will take a financial loss on the original loan.

Drawing much attention are the provisions for the first time home buyer in this bill. The first time homebuyer, under the new law, will be eligible for up to $7,500 in tax credits. This is not to be confused with a grant, more like an interest free loan that must be paid back over 15 years. When purchasing a first home this can be very helpful none-the-less. If the tax credit is not fully paid when the property is sold, selling for more than the original price, the outstanding balance is due at the time of the sell.

The eligibility requirements for the bill include home ownership status for first time buyers, citizenship, and income limitations. According to the law, a first time home buyer is any buyer who has not owned a home during the last three years. Additionally all U.S citizens are eligible to be a part of the program providing they file taxes.

The tax credit limitations for the first time homebuyer include the filing status of single or head of household being able to claim the full $7,500 if the adjusted gross income is under $75, 000. These persons who earn between $75,000 and $95,000 can claim a partial first time home buyer tax credit. For the status of married filing jointly the income limit is $150,000 to receive the full credit and between $150,000 and $170,000 can claim the partial first time home buyer credit. Tax filers with adjusted incomes greater than the limits shown are not eligible for the tax credit at all.

Homes purchased and closed on between the dates of April 9, 2008 and July 1, 2009 by first time home buyers will receive the tax credit if they are eligible. In addition, if the first time home buyer who qualifies for this credit pays less than $7,500 in income taxes the government will refund the difference. Tax payers who receive tax refunds will have the homebuyer tax credit added to their refund. This tax credit can be claimed on the 2008 or 2009 returns depending on the year the home closes.

The law offers provisions for low income housing and seniors as well; each with their own requirements and regulations. The bill is an effort to help the housing crisis and the economy on the whole.