New housing package likely to ease anxieties of first-time homebuyers
Hawaii residents can receive as much as $7,500 off their home
STORY SUMMARY »
Hawaii's homeowners and homebuyers could get some relief from a housing package signed yesterday by President Bush that makes it easier to refinance loans into affordable loan products and eases market access for first time buyers.
The package will allow Hawaii's first-time buyers to receive a tax refund worth up to 10 percent of a home's purchase price, up to a maximum of $7,500. In addition, the package also safeguards the nation's two largest mortgage finance companies and provides a plan to help financially troubled homeowners avoid losing their homes -- moves that could help more prospective Hawaii buyers obtain loans and preserve home values across the state.
"Hawaii will definitely see some positive impacts as a result of this package, which has been called the most important housing legislation in a generation," said Chason Ishii, president of Coldwell Banker Pacific Properties.
FULL STORY »
Hawaii's real estate community expects to see more activity as a result of a new housing package signed yesterday by President Bush that makes it easier for homeowners to refinance their loans into affordable loan products and eases access to the market for first-time homebuyers.
The package will allow Hawaii's first-time buyers to receive a tax refund worth up to 10 percent of a home's purchase price, up to a maximum of $7,500. The refund, which serves as an interest-free loan that must be repaid in interest-free equal installments over 15 years, will help more first time homebuyers get into the market said Scott Higashi, executive vice president of sales for Prudential Locations LLC.
"I'm hopeful that it will help stimulate first-time homebuyers in Hawaii who are waiting on the sidelines," Higashi said. "I know there are a lot of fears out there."
In addition, the package also safeguards the nation's two largest mortgage finance companies and provides a plan to help financially troubled homeowners avoid losing their homes -- moves that will help more prospective Hawaii buyers obtain loans and preserve home values across the state, said Chason Ishii, president of Coldwell Banker Pacific Properties.
"Hawaii will definitely see some positive impacts as a result of this package, which has been called the most important housing legislation in a generation," Ishii said.
John Riggins, owner of John Riggins Real Estate, said that he already is fielding more inquiries from first-time homebuyers who want to take advantage of the tax benefit.
"All of the sudden, those lower-priced properties on the market are getting more activity," he said. "I have a $295,000 listing at Century Park and a little house at Makaha that are getting lots of requests for showings. That was not happening several weeks ago. We've been anticipating these credits for awhile and they are already having an impact."
In addition to the first-time homebuyer stimulus part of the package, Ishii said that Hawaii buyers and homeowners will be able to take advantage of new permanently higher loan limits for FHA, Fannie Mae and Freddie Mac borrowers. The new loan limits, which are capped at $625,500, will take effect Dec. 31, 2008. In addition, from now until the end of 2008, loan limits for Veterans Affairs loans also will rise.
"This new law will usher in much-needed relief for the current foreclosure crisis and is critically important to helping keep families that are at-risk for foreclosure in their homes," said Conrad Egan president and chief executive of the National Housing Conference, a housing advocacy nonprofit that lobbies for national policies and legislation that promote suitable housing.
In the past, Hawaii's mortgage industry had said that tighter underwriting requirements had prevented them from being able to help some troubled homeowners refinance loans. But the new law should give Fannie Mae and Freddie Mac more ability to help, Ishii said.
"Now, they know that they will be able to sell their loans," he sad.
Strengthening Fannie Mae and Freddie Mac could boost consumer confidence, which some real estate experts have said is the main cause of market decline.
"Fear of potential for dropping values has contributed to a slower sales environment in Hawaii," Higashi said.
In addition, the increased financing opportunities will help protect Hawaii's home values by mitigating some impacts of the subprime crisis, Ishii said.