The Federal Deficit: How will this affect you?

By: Felix-Torres Colon, Executive Director, NHS of Baltimore

Many Americans consider the Federal deficit to be the most important economic problem of our time. In response to this problem, the House of Representatives has proposed a series of cuts in the housing field that are draconian. We are not taking a position on the need for a balanced budget or the reining in of government spending, but we thought all of you should know what impacts some of these proposed cuts could have on NHS and our community.

Community Development Block Grants (CDBG)

CDBG is a federal program that funds a wide variety of community and economic development programs at the local and state level. The program offers local and state governments a wide latitude of ways to invest these funds. They are used to fund everything from housing counseling to infrastructure improvements. The House has recommended a 63% cut. If passed by the Senate, the NHS would have to lay off over half its staff. We would no longer be able to help families become homeowners, stop foreclosures or lend to clients.

Housing Counseling

The need for fair unbiased information about home buying is greater than ever. The economic crash was driven by bad mortgages to uninformed borrowers. Counseling is one of the proven ways to avoid this event from happening again. The House has zeroed out the counseling budget, this means NHS would have to lay off the majority of counselors. Hundreds for families would no longer be able to get the training they need to make the best decisions for their future.

Home Affordable Modification Program (HAMP)

The House is currently considering ending the program. Although this program is not perfect, it can be fixed. HAMP is currently one of the best tools we have to prevent foreclosures. If HAMP is abolished, hundreds of families in Baltimore will lose their homes.

These are tough times which call for tough decisions, but they have to be smart decisions.

Housing: How To Invest Your Tax Return

By: Raevyn Jones, Marketing Coordinator, NHS of Baltimore

Whether or not you have filed your tax return, how you will spend your tax refund always comes to mind around this time. Investing some money from your tax refund is one of the best ways to spend it. However, before you make the decision to invest your tax return, you should think about how your refund fits into your investment strategy. For homeowners or people looking to become homeowners, this refund could have a long term impact.

One of the biggest things you may want to consider when thinking about investing is your housing fund. In order to receive the best possible interest rate on a house and avoid private mortgage insurance, it is smart to have a good amount of savings for your down payment. Other programs and housing incentives can assist you with your down payment.

Using your tax refund to eliminate current debt is another good investment if you are looking to buy a home. Eliminating debt with the highest interest rate will cost you less money in interest in the long run. With current credit card interest rates usually being 14% at the minimum, paying off your debt is an excellent investment. The higher your credit score, the better deal you will be able to get on a house.

If you are a homeowner, investing in your home may be the best investment that you will ever make. There are many affordable ways of investing your tax refund to increase the value of your home. Upgrades and improvements to the kitchen or bathroom are great ways to maximize a return on the investment of your home. This investment could prevent major problems down the road as your house gets older. Also if for some reason you ever choose to sell your home, you have increased the value of it. Renovations to your home may also be written off on your tax return for the following year.

Another good investment for homeowners is paying down the principal of your mortgage. Contributing additional money to your mortgage will allow you to pay the loan off sooner and you can save thousands of dollars in interest over the life of the loan. Interest rates are currently lower than ever, so if you are eligible to refinance your hope this may be a good option as well.

Although a tax refund cannot change your future by itself, it can have a long-term financial impact. For more ideas on how to invest your tax refund, you may want to opt to take a free financial fitness class.