The bill is perhaps the most significant housing legislation to pass in decades, helping resuscitate a struggling nationwide housing economy and keeping homeowners who are facing foreclosure in their homes.

Of course, the main thrust of the initiative is to keep people in their homes. And to do that the program allows for homeowners who are “upside down” on their mortgages (owe more to the bank than the homes are worth) to obtain more affordable mortgages backed by the Federal Housing Administration (FHA).

Distressed homeowners will be required to first show that they can afford new reamortized loans before reworking their existing mortgages. In addition, lenders would have to agree to the new terms, which could translate into losses.

However, lenders would likely rather help homeowners stay in their homes rather than enduring more costly and drawn-out foreclosure situations.

Of course, the bill also includes a tax credit of up to $7,500 for first-time homebuyers who purchase houses between April 9, 2008, and July 1, 2009.

For more on the vast benefits of the Foreclosure Prevention Act click here. To get started searching for a home — and taking advantage of the tax credit — click here!

A United States Senate ad hoc committee — headed by Senators Christopher Dodd (D-CT) and Richard Shelby (R-AL) — are currently spearheading a bi-partisan housing rescue bill that could include a $7,000 one-year tax credit for purchasers of foreclosed homes if the legislation is passed.

In addition, the federal government would earmark $4 billion in grants to allow local governments to buy and refurbish foreclosed properties for resale or for use as “low-income” rentals. And the bill includes $10 billion for local housing agencies to refinance subprime loans and provide new mortgages for first-time homebuyers.

That’s not all.

According to MortgageNewsDaily.com, $100 million more will be allocated to expand counseling for homeowners at risk of defaulting on their loans.

This is good news for the thousands of homeowners nationwide struggling to make ends meet and who are desperate for some sort of relief. The bill would also encourage buyers to purchase Real Estate Owned (REO) properties, helping lenders and other financial institutions get them off their books faster.

And more important, it gives you more of a reason to purchase foreclosed properties (not like you needed another one) with a huge tax break on top of already discounted homes.

So what are you waiting for? Start your foreclosure search today RIGHT HERE and be one of the first to take advantage of this great news!