The latest bailout making its way through Washington is aimed directly at the residential real estate market. The Wall Street Journal reports:
The Treasury Department is considering a plan to revitalize the U.S. home market that would push down interest rates for loans to purchase a home, according to people familiar with the matter.
The plan, which is in the development stage, would temporarily use the clout of mortgage giants Fannie Mae and Freddie Mac to encourage banks to lend at rates as low as 4.5%, more than a full point lower than prevailing rates for standard 30-year fixed-rate mortgages.
Heck, at 4.5% cost of capital and 5-to-1 leverage (20% down payment) i would be a bidder, in size, for residential real estate at current prices.
Source:
U.S. Eyes Plan to Lift Home Sales
Deborah Solomon and Damian Paletta
The Wall Street Journal
December 3, 2008