The Federal Reserve Bank of New York’s new lending tool lets real estate agents and real estate brokers take a loan of up to 10% of a home’s value.
It is a step in the right direction for the struggling real estate market.
The tool lets sellers borrow against the value of their homes and then sell them to the buyer or lender of their choice.
It has become the preferred way for buyers to secure a loan, and sellers can get a better rate on the deal.
“This tool is a really positive development for both sellers and buyers, as it allows sellers to get more money back from their home and buyers to be able to purchase a home that is a higher value, more desirable, and more secure than the previous homes that they bought,” said Steven Kort, president and chief executive officer of the New York Fed.
“In my opinion, it’s a win for everyone.”
In addition to the 10% interest rate, the Fed has allowed sellers to take a 30-day grace period after they submit their transaction.
This grace period is intended to allow sellers to sell their properties before they run out of money, a process that can take up to two years, according to the New America Foundation, a consumer advocacy group.
A buyer must be able give a home a mortgage-equivalent value of $200,000 or less.
A home can be sold for more than that amount if the seller can show it was purchased at least 10 years ago.
Real estate agent Jennifer Wasser, of Wasser & Co., said the tool is also helpful for sellers.
“A lot of sellers are trying to figure out how much they can get out of this, and the 10-year grace period helps them make that decision,” she said.
“It gives them some peace of mind that they can sell and go home, knowing they’re not going to be in the red.”
Real estate agents say they typically see buyers from the middle class, and even those with less money, willing to lend.
“We’ve been in a pretty tough market for a long time, so a 10- to 30-year loan is a great deal for us,” said John O’Leary, president of O’Loughlin Group Real Estate.
“Our goal is to help people get into the market in a sustainable way.”
This new tool is available only in New York and is available for free at the New Markets Real Estate Center, located in Manhattan.
The Fed is also working with state regulators on a new tool that allows sellers and lenders to work together to reduce home-price inflation, according a statement.
“As a result of this initiative, New York State is seeing an overall decrease in home prices, with inflation falling for both new and existing home sales,” the statement said.
This new system allows buyers and sellers to work out the best deal, with both parties making decisions independently.
The agency has also increased its support for homeownership programs.
In addition, the New Statesman, a New York-based magazine, recently ran an article detailing how the Fed and its banks have helped homeowners by issuing mortgage insurance, which provides protections for borrowers when the bank loses money on a loan.
In December, the Federal Reserve and its bank branches issued $5.9 trillion worth of mortgage insurance for homebuyers.
The bank is also taking steps to make it easier for sellers to obtain financing for their properties.
Last week, the Consumer Financial Protection Bureau, a part of the Department of Justice, announced it was expanding its enforcement of the Consumer Finance Protection Act, which prohibits lenders from charging borrowers more than 30% of the purchase price.
The bureau is also expanding its consumer protections for small business owners.
For example, the bureau is looking at new rules that would prohibit a business owner from making any financial decisions that affect a home.