Friday, February 6, 2009

solution for housing downturn

US govt should activate section 8 assistance for home ownership. A subsidy for buying and keeping a home.Following steps can be taken.

  1. Reduce the mortgage to appraised value one time deal with a net amortised cost of $1000.

  2. Reduce the interest rate on all mortgages to 5% for five year with a cap of 2 percent.

  3. Provide a monthly subsidy of $600 per month initially for 5 years and extend it if needed.Total cost for two million homes is 14 billion per year.New home ownership program.Better than $ 15000.00 tax credit in the first year. This is in essence section 8 housing for home ownership.

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