Housing Taxed to Pay for Extension of Benefits
The law signed by President Obama to extend the payroll tax cut and maintain Medicare payments and unemployment benefits uses increases in the fees charged by Fannie Mae and Freddie Mac to guarantee mortgages to help offset the costs of the law. The law also uses funds from premiums charged for insurance on FHA loans. The National Association of REALTORS® (NAR) strongly opposed the use of these fees for non-housing issues. The increase will remain in effect through September 30, 2021. Lenders who choose to pass this increase on to borrowers will likely increase the rate offered to a borrower by 0.1 percent sometime before April 1, 2012. Analysts estimate the increase in cost over 30 years to be between $4,000 and $5,400 on a $200,000 loan, or $11-15 a month.