Chicago Relocation

Housing and Economic Recovery Act (H.E.R.A.)

June 23, 2009

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Housing and Economic Recovery Act (H.E.R.A.) : One of Rubloff’s hard working interns, James Waller, shared some comments on HERA – The Housing and Economic Recovery Act.  James is currently pursuing a real estate degree at DePaul University in Chicago IL.

The Recovery Act is estimated to be $13.61 billion for various projects created by the Department of Housing and Urban Development. The Act will surely affect those transferring into or out of Chicago, or anywhere nationally.

This program will create tens of thousands of jobs by having workers produce modernized homes that are energy efficient. Additional resources will be used to stabilize and revive local neighborhoods and housing markets with heavy concentrations of foreclosed properties. This funding will also assist the vulnerable families and individuals who are on the brink of homelessness or have recently become homeless.

To be eligible for H.E.R.A. a candidate must have a loan on an owner-occupied principal residence. Your monthly mortgage payment must be greater than minimum range of about 31 percent of the borrower’s total monthly income. The borrower must certify that he/she did not obtain the existing mortgage fraudulently and has not intentionally defaulted on an existing mortgage. The borrower must also show they have not been convicted of fraud. Only the primary residence is allowed to receive this program, so this means no speculators, investment properties, second or third homes will be refinanced

A majority of homeowners that are facing foreclosure were misled or were in other ways the victims of unfair lending practices. In order to prevent future abuses by lenders, this act will incorporate a nationwide loan originator licensing and registration system to set minimum standards for all residential mortgage brokers and lenders.  It also strengthens mortgage disclosure requirements to help ensure that borrowers understand their mortgage loan terms.

Commercial real estate is impacted primarily through those provisions of the bill focused on green building and energy efficiency as well as business tax incentives. H.R. 1 provides significant funds for state energy programs, which could be used to support commercial property owners’ investment in energy efficiency upgrades. While commercial property owners seeking to invest in alternative energy systems for onsite power generation would benefit from the Department of Energy Renewable Energy Loan Guarantees Program.


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