Wednesday, August 18, 2010

How the federal government is now helping out the wealthy with your tax dollars

Did you know that the federal government is now subsidizing luxury apartments in Manhattan which range from $820,000 to $3 million? Yup, those are just the sorts of mortgages that the federal government should be insuring.
The FHA, created in 1934 to make homeownership attainable for low- to moderate-income Americans, is now providing a lifeline to new Manhattan luxury condominiums after sales stalled. Buildings featuring pet spas, concierges and rooftop lounges are applying for agency backing to unlock bank financing for purchasers. The FHA guarantees that if a homebuyer defaults on his mortgage, the agency will pay it.
The FHA doesn't want there to be unfilled condominiums out there so it's moving into the priciest urban housing market to insure loans. Yup, that's just why FDR created the FHA during the Great Depression when the concern was to make homeownership attainable for low- and moderate-income Americans. Now we're helping out luxury condominiums. Remember this little story next time you hear about how the Obama administration is fighting out there for the little guy.

The world really is turned upside down.

4 comments:

Rick Caird said...

As I recall, these are also 3.5% down mortgages. Hence, a small decline in value and these mortgages will be underwater. Lovely.

pumping-irony said...

Ah, big government... is there anything it can't foul up?

tfhr said...

Hey, be fair, Charlie Rangel can't rip off the tax payers all by himself, no matter how many rent controlled apartments (4) he has.

equitus said...

It makes perfect sense. Are the buyers of said properties the Dem's core ($$$) constituency?