In an effort to breath some life into our Nations dying housing market The National Association of Realtors is advocating a government backed interest rate buy down to lower the overall interest rate to 4.5% for a temporary but unspecified period of time. The N.A.R. believes that such a rate subsidy will stabilize the national housing market by stimulating sales. (The NAR has calculated that this 1% drop in interest rate could result in as much as 500,000 home sales). 
Great Idea but who gets to pay for it? Well, It has been suggested that the funds for such a buy down come from the **U.S. Treasury Departments Troubled Asset Relief Program (TARP)…which is the biggest part of the ***Emergency Economic Stabilization Act of 2008 (aka “the Bail Out”) This interest rate would be made available to all homebuyers purchasing new or existing homes up to $1 million in price.
There is, as usual, some controversy surrounding the bill. The biggest complaint is that while the NAR’s plan would absolutely stimulate buying, it has not made any provisions in their stimulus bill to assist the people who are already in serious danger of losing their houses. I’d be interested to hear why, but in the end it doesn’t matter…the biggest jobs of the National Association of Realtors is to protect the housing market and preserve the profession of real estate, and so forward thinking is called for and while their plan does not make accommodations for people already in trouble it goes a long way toward insuring that the next generation of home owners don’t encounter the same problems in the future.
** read more about the public law that established TARP
***read the details of the Emergency Economic Stimulus Acts of 2008
Contact Anne-Marie Mckenzie & Associates for More Information
