Earlier this week the housing bill was signed into law, which among other things allows the Treasury Department temporary authority to lend money to both Fannie Mae and Freddie Mac while also tightening control and oversight on these 2 organizations.
The bill also provide first time home buyers with a credit up to $7500 towards a purchase of a home when buying before July 1, 2009. My understanding is this credit is more like a interest-free loan that will need to be paid back over 10 - 15 years.
If you are currently renting and are in an area that you plan on staying for at least 3 - 5 years than this tax credit is a wonderful opportunity to get into a home. Chances are with the tax credit, interest rates still being fairly low and many homes on the market you can get a house, condo or townhome for what you currently are paying in rent.
Of course this is a major decision and it is important to work through income scenarios to determine what works best for your individual situation. Are you ready for the commitment that owning a home brings, if the toilet overflows there isn't a manager to call.... and the toilet WILL overflow.
If you are ready then work with a mortgage person that you trust, that is willing to take the time to walk you through all the paperwork. This is the largest investment of your life and you should truly understand exactly all your financial obligations - not just the monthly mortgage payment but taxes, utilities and fees associated with buying a house.
It is also important to find a realtor that is knowledgeable about the market where you are interested in purchasing a home. What is happening in the area, how are foreclosures impacting property values, what are the ammenities that are important to you - short commute to work, access to shopping, bike trails nearby - these are all things you should consider and your realtor should take the time to research this data.
Not a first time home buyer - the bill also allowed the FHA to increase the size of loans to $625,000 that they are willing to insure in the highest cost areas. If you are looking at selling your current home and purchasing a new one but couldn't get FHA financing because of the size of the loan that you needed now you may be able to. It is important that you make an informed decision on which loan and loan types are right for you and FHA is just one of many that are available.