Law meant to fix foreclosure crisis

Homeowners can get fixed-rate loans

Some provisions of the housing bill that President Bush signed into law last week:

-Gives the Federal Housing Administration $300 billion in new lending authority and relaxes standards to provide affordable, fixed-rate mortgages to an estimated 400,000 debt-ridden homeowners.

Any losses will be covered by an affordable housing fund financed by Fannie Mae and Freddie Mac, the government-sponsored companies that finance mortgages.

-Allows the Treasury Department temporary authority to lend money to Fannie and Freddie or buy their stock to avert a collapse of one or both of the mortgage giants. That authority expires Dec. 31, 2009.

-Creates a new regulator and tightens controls on Fannie and Freddie, including power for the regulator to approve pay packages for company executives.

Creates a new affordable housing fund drawn from their profits. Permanently raises the limit on the loans Fannie and Freddie may buy to $625,000 in the highest-cost areas. Allows them to buy loans 15 percent higher than the median home price in certain cities.

-Provides $3.9 billion in grants to the hardest-hit communities for buying and fixing up foreclosed property.

-Modernizes the Federal Housing Administration and allows it to back loans for borrowers with weaker credit histories.

-Prohibits the FHA from insuring mortgages in which the borrower's down payment is paid by the seller, beginning Oct. 1. Places a one-year moratorium prohibiting the agency from charging premiums based on the riskiness of the homeowner until Oct. 1, 2009.

-Provides $15 billion in housing tax breaks, including for low-income housing. Gives a credit of as much as $7,500 for first-time buyers who purchases homes from April 9, 2008, to July 1, 2009. Allows people who don't itemize their taxes to claim a $500 to $1,000 deduction on their 2008 property taxes.

-Gives states an additional $11 billion in tax-free municipal bond authority for low-interest loans to first-time home buyers, construction of low-income rental housing and refinancing subprime mortgages.

-Offers protection from investor lawsuits for mortgage holders that modify loans to borrowers who are in default or about to default.

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Provides $180 million for pre-foreclosure counseling and legal services for distressed borrowers.

-Limits the ability of owners of vacation homes and rental properties to take full advantage of an existing law that exempts as much as $500,000 of profit from capital gains taxes when the house is sold.