what is the housing and economic recovery act hera 
the housing and economic recovery act hera was drafted to address the fallout from the subprime mortgage crisis of 2008 hera allowed the federal housing administration fha to guarantee up to 300 billion in new 30 year fixed rate mortgages for subprime borrowers to participate lenders were required to write down the balances on principal loans up to 90 of their current appraised value 1understanding the housing and economic recovery act hera the housing and economic recovery act hera was ultimately intended to renew public faith in government sponsored enterprises gses that provided home loans namely fannie mae and freddie mac it allowed states to refinance subprime loans with mortgage revenue bonds and created the federal housing finance agency fhfa as a new agency the fhfa used its newfound authority to put fannie mae and freddie mac under conservatorship in 2008 1hera also included a number of subtitle acts under the main act including the the goals of the fannie mae freddie mac conservatorship include preventing the enterprises from needing another taxpayer bailout ensuring mortgage credit availability for affordable housing and keeping the secondary mortgage market strong this subtitle act in hera offered a refundable tax credit for qualified first time homebuyers related to purchases on or after april 9 2008 and before july 1 2009 equal to 10 of the purchase price of a principal residence up to 7 500 it also eliminated the credit for taxpayers with incomes over 75 000 150 000 for joint returns 1for those receiving the tax credit repayment was expected over 15 years via equal installments through a surcharge on the taxpayers annual income taxes it also provided emergency assistance for the redevelopment of abandoned and foreclosed homes 1this subtitle act increased the fha loan limit from 95 to 115 of area median home price up to 150 of the gse conforming loan limit it also mandated a 3 5 down payment for all fha loans and placed a 12 month moratorium on the u s department of housing and urban development s hud s implementation of risk based premiums 2it also prohibited seller funded down payments while authorizing the fha to insure up to 300 billion of 30 year fixed rate refinance loans up to 90 of appraised value for distressed borrowers mortgage commitments made on or before jan 1 2008 were covered under the act 1in addition the act required existing mortgage holders to accept the proceeds of the insured loan as payment in full for all preexisting indebtedness lender participation in this program was voluntary 1fha loans may require a higher down payment of 10 for borrowers with credit scores below 580 this part of the act required all states to implement a mortgage loan originator mlo licensing and registration system by aug 1 2009 or aug 1 2010 for legislatures that meet biennially states were allowed to operate their own systems subject to stringent federal standards or could participate in the nationwide multistate licensing system and registry nmls 1mortgage lending discrimination is illegal if you think that you ve been discriminated against based on race religion sex marital status use of public assistance national origin disability or age there are steps that you can take one such step is to file a report with the consumer financial protection bureau cfpb or hud 