The Housing and Economic Recovery Act of 2008

The American dream is the foundation for our democratic republic. The dream was the young homeowner with family and job climbing the corporate ladder, at the middle class, becoming affluent through his labors. His rooting in the soil of American industry is eloquently classed in the writings of Horatio Alger. He speaks of our freedoms extending from our ability to negotiate capitalism with ease through our work ethic, civic or community spirit and government responsiveness to the public. This hallmark of American society sits firm, balanced in the scales of justice.

The government of the United States of America has provided Americans with programs of merit designed to do the negotiation of benefits for them and also provide them with access to quality opportunities at all economic levels, while they are citizens of this beloved country. With the formation of the Federal Bank under the Jacksonian era, the United States government has been able to reach out to its citizens with grants, loans, mortages and similar financial benefits for qualifiers. In its efforts to have universal care for its citizens especially in the important realm of housing, programs were created and regulatory agencies and laws were generated. One of such actions of regulation is the Federal Housing Finance Regulatory Reform Act of 2008. It regulates the housing government sponsored enterprises called (GSE’s).

Two such programs regulated are Freddie Mac and Fannie Mae as well as Federal Home bank loans. This creates a new program to provide loans at FHA after lenders take deep discounts to cease some foreclosures. It extends broad authority to the regulator, enabling them to establish capital and management standards, enforce its orders and regulate asset growth. The program is based on five principles, Long term affordability, no investor or lender bailout, no windfall for borrowers, voluntary participation, and the restoration of confidence. Some of the specifics as expressed by this articles sponsor are up to $7,500 in purchase credits for first-time home buyers, Conforming loan limit increases to $625,000 in high-cost areas, Earmarked funds for local governments to buy and restore blighted homes and neighborhoods. This seems to be nearing a no foreclosure act.

The point of interest amidst these quality assurances is the capital gains exclusion. It would seem most would want to gain at maximum and pay minimum tax upon the sale of their home. The new law establishes a new formula multiplying the profit from the sale of the home times the number of days the home was primary divided by the number of days the home was owned. This done more or less to combat the early home sale maneuvering, by some sellers. They would benefit by claiming $250,000 of home sale profit tax free, ($500,00 if filing jointly provided they physically lived in the home for 2 of the previous required five years. Despite the noise from these changes the Government has moved forward in providing accessibility to the American dream by modernizing FHA.