Orlando Custom Home Builder

President Obama’s Homeowner Affordability and Stability Plan

Newly-elected President Obama has recognized the issues surrounding the home and mortgage market in the current economic climate. Key issues such as the inability of homeowners to refinance mortgages with lower interest rates, homeowners facing foreclosure, and declining property values due to the high number of foreclosures have all been addressed by Obama’s Homeowner Affordability and Stability Plan. The following sections will highlight Obama’s plans to help homeowners.

Refinancing Difficulties

Interest rates are currently at historic lows. Obviously, homeowners would like to refinance their loans to take advantage of these rates. However, many of the homeowners who need to refinance to help themselves financially cannot because their loan-to-value ratios are too high to qualify. This means that they owe a significant percentage of what their home is valued at. With dropping property values, more and more homeowners are failing to qualify for refinancing as their loan-to-value ratio has worsened. Obama’s plan is designed to help as many as 5 million homeowners qualify to refinance their loans.

$75 Billion Homeowner Stability Initiative

The point of this initiative is to help at-risk homeowners who are experiencing unaffordable monthly payments on their homes. Many of these people are in adjustable-rate mortgages and have seen their payments increase to amounts that are out of their means and forcing them to the brink of foreclosure. The goal is to work with lenders to reduce rates so that monthly payments will not exceed 38% of a household’s income and allow for further reduction if that is still not feasible for a given household.

Low Mortgage Rates

The last piece of the plan is to “support low mortgage rates by strengthening confidence in Fannie Mae and Freddie Mac.” The Treasury Department will increase its preferred stock commitment to the institutions as well as continue to purchase their mortgage-backed securities. Additionally, the administration will work alongside Fannie and Freddie to support the efforts of state housing finance agencies in serving homeowners.

Looking to Buy a Home Today?

The current mortgage rates and the work done by Obama to help homeowners are creating a great situation for those looking to buy a new home. If you are interested in taking advantage of the current homeowner’s market and would like to construct a custom home in the Orlando area, contact the Orlando homebuilders of BRC Homes, Inc. today at 407-612-6998.