Is California creating a new affordable housing act? They are discussing it. This will have a great impact on all homeowners. Right now, the leaders of the state of California are discussing taxing home buyers to fund affordable housing to those who cannot afford to rent.
The proposed plan is to charge new home buyers $75 on the HUD 1 settlement form (the standardized closing statement) which would raise between $400 million and $1 billion per year to provide help to low income renters.
With more and more people losing their homes every day, more and more people have to go rent with badly damaged credit and little to no cash on hand. With a foreclosure, eviction or bankruptcy on your record, it is very difficult to rent. If you are able to rent, you need a substantial deposit up front.
Although it’s only $75 per closing, home buyers are already hit with thousands of dollars worth of fees that can be as much as 4% of the price of the home. This is a proposed act right now, but I believe it’s definitely a program that California will pass long term. This program will help many low-income families with their housing needs while costing home buyers only a small, relatively insignificant fee.
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