A New Bill Concerning REOs And Retirement Penalties
The Housing Recovery Act of 2011 was introduced to the House of Representatives by Bill Posey (R-FL) . In essence, what the bill proposes is that people would have the ability to use qualified retirement plans to purchase a home that has been in the foreclosure process for over a year without paying early distribution penalties. While it may not be a total fix for the current housing situation, at least it’s a step in the right direction by trying to help.
What they are trying to stifle is investors who want to just “flip” homes. The encouragement within this bill is for owner-occupants and second-home buyers to create stability within neighborhoods, rather than the high turn overs (Remember the days when people actually knew who their neighbors were?).
On qualified homes (in foreclosure for a year or more), the buyer would have to use the funds from their Roth IRA, 401(k) or pension plan within 120 days of receiving them by purchasing a home. As the bill is in its early stages, no one quite knows when that qualifying “year” begins on any given home.
Whether Posey’s bill is “the answer” or not remains to be seen, but it appears his heart is in the right place (yes, I said it…a politician with heart). One thing is for certain, since lenders are requiring so much cash down prior to making a purchase these days, at least this bill should loosen up some funds for folks that have been wanting that second home and were previously unable to do so.
For more about buying REO’s and Foreclosure properties, please feel free to contact us or visit our main website at ArtisanRealEstateGroup.com
