One real estate expert thinks federal subsidies for first-time homebuyers could help jumpstart the housing market.
First-time buyers should be "offered conservative 30-year mortgages that require buyers to qualify by putting down a real down payment, and be able to service monthly mortgage payments," James Grosfeld, director of Blackrock and Lexington Realty Trust told CNBC on Tuesday.
"Congress should provide first homebuyers of new and foreclosed homes a subsidy (a form of financial assistance at about $200 per month) for three years," Grosfeld said. "Temporary mortgage subsidies are very important to home buyers and they are an inexpensive way of promoting the sales of homes."
This subsidy program would generate roughly "$90 billion of new home sales," which in turn will help providers of services and products—that go into these homes—and "create hundreds of thousands, if not over 1 million, new construction jobs," he said.
Under this plan though the buyer must qualify at the then existing rate so that when "his or her payment rate jumps in year four, the buyer qualifies for the mortgage," Grosfeld said.
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