This should really just be limited to 1 (or maybe 2) houses per owner at one time.
That would create a subsidy for people to own their house (middle class rent control), allow people to move from one to another, and stop wasting tax money on subsidizing investors.
Do you have a source? Does this mean one could get up to $10mm in housing guarantees? Or does it mean you can buy ten $100k properties with conforming mortgages?
[1] https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Announce...
But, if you can use a lease against the house as proof of income that could offset the mortgage.
That’s basically the secret sauce to “get rich with real estate” content.
Edit: it has no effect on savvy individuals because they can always put each new home inside an llc, continually keeping their count low. This is what you would do after 10 mortgages today, though most people would have put the homes in llcs by 10 anyway for other reasons.
There's zero reason for an LLC for own a SFH other than as some sort of tax scheme like you mention. Require that any mortgage on a SFH or owner-occupied multiplex be held by an individual. If you want an LLC to own a SFH/OOM, buy it in cash.
In my state a trust can be an LLC, but it doesn’t have to be. My family trust isn’t, but others are.
I'm personally not a fan of such a situation but it's a reasonable one in today's world.
Seems like an easy fix for the case that's reasonable that doesn't require people to subsidize the wealthy.
The FHFA assesses up-front fees on second homes [1]. One could simply delay this assessment, for a fee, and not assess it if e.g. a year down the line the borrower only has one mortgage. (That said, it seems simpler to reduce the threshold to two from ten.)
[1] https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Announce...
Not a fan even in today's world. Example:
The house next to mine sold for $300k 2y ago. Those owners put about $50k into renovations and sold 1y later for $450k. The current owner did nothing (didn't even mow the lawn!) and 6m later decided to pack up and move across country for a job. He put the house on the market for $650k. It's beyond insulting. That house is going to sit on the market for a long time unless he is willing to make no money or even lose money on the overall transaction.
The government should not be subsidizing anyone going for a second slice of cake, when there are lots of people who haven’t had a first slice.
Mortgage subsidies don't meaningfully affect homelessness. Someone putting down a deposit with a developer for a fifth property to rent actually expands housing supply. That tweaks only rent-versus-own ratios.
What does skew home supply is vacancy. Whether due to offshore holders treating New York apartment as poker chips, seasonal vacationers, delusional landlords asking above market, or NIMBYs blocking development, vacancy decreases housing supply and thus increases housing costs for renters and owners alike.
No, it’s like saying someone will die from lack of corn. When they can substitute with grain. Shelter is shelter, rented or owned.
This has nothing to with mortgage subsidies and it’s disingenuous to use that as an argument against them.
Second homes are top 5% stuff [1].
If you have a taste for the interior, there are gorgeous places where five figures buys a home, or less than $10k down and $1k/month. That's something more that just the rich can afford, particularly if the first home is in a similarly-affordable place.
[1] https://www.statista.com/statistics/228894/people-living-in-...
.....such as?
Prices have gone up everywhere.
Tawas City, MI is hours from the nearest medium-sized town. There are no jobs, no social activities besides bars, very few restaurants, and no five figure homes for sale ($150K will get you 1450 square feet).
Mesick, MI. Literally nothing but forest, and 1.2 empty acres is $125K.
Clarion, IA. There is nothing beautiful about anywhere in Iowa. You can, however, get a nearly-falling down 1100 square foot house for $85K (everything else on the market, and there's a bunch, is 6 figures).
Where are these gorgeous places where rich people haven't already bought all the homes?
Now, I think the market will normalize a bit but still. There is no such thing as a starter house unless you're willing to give up a good education for your kids, live in bumfuck nowhere (and that's coming from someone who lives in Des Moines, IA-- which many people would consider nowhere).
Move rural? Good luck. Small towns are drying up for any/all services. Amazon and co are pushing out anything local for shopping. Cost of living for stuff not related to housing is just as high or HIGHER due to lack of infrastructure, plus the lack of meaningful choices (small town stores have higher prices due to lack of purchasing power and limited suppliers).
I'm not saying it's impossible, live off the grid and have your own farm. But doing that with a family, while working 60+ hours a week just to pay your rent, unless you're an SWE. The crunch is REAL for most people.
Five figures for a house? Riiight. In 1980, sure. Or if you like buying a house of cardboard.
Naive question, but wouldn’t increased demand raise the price, not lower it? Why’s Florida different?
I'm not sure why someone would assert this unrealistic calculation, except one might graciously interpret it to be describing multiple situations...despite that being completely useless information.
When interest rates were bottomed out, this statement in total wasn't true (at least the $1k/mo part for a 500k loan). I happened to end up in a home that was $490 with 7k down and 2.5% and the payment is naturally above $2k/mo. Finding this situation today is impossible, ofc.
I feel attacked. You haven't been to Dubuque.
Limiting it to 1 or 2 would have zero impact on either corporate money or savvy individuals and, would likely reduce upward mobility, as navigation of these subsidized markets is one of the most reliable paths to go from low to medium net worth.
Once someone has 8 figure net worth, these subsidies are noise. I really get the feeling the baddies are using much more egregious subsidies than this one.
Now if you're buying it as an investment property, depending on your down payment, that may increase your interest rate.