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Housing Bill Moves Forward One Week After Builder Visits
One week after a large delegation of home builders scoured Capitol Hill to advise lawmakers of the urgent need to stabilize the nation’s rapidly eroding housing market, the House of Representatives on May 8 passed H.R. 3221, the American Housing Rescue and Foreclosure Prevention Act, legislation that would help home owners who are struggling to pay their mortgages and boost housing and the faltering economy.
“On April 30, more than 1,200 home builders delivered an urgent message to Congress to enact legislation to jump-start housing, save jobs and restore confidence,” said NAHB President Sandy Dunn. “H.R. 3221 would help achieve these aims. With the economy on the edge of a deep recession, we urge House and Senate negotiators to move swiftly to reconcile their differences and craft a final bill that the President can sign into law in order to bring much-needed relief to the American people.”
The House bill would create a first-time home buyer tax credit up to $7,500 for the purchase of any home for those who earn less than $70,000 annually, after which it phases out, at $140,000 for married couples. The credit would become available as of April 9, 2008 and expire on April 1, 2009. Home buyers would be required to repay the credit to the government, without interest, over 15 years.
“The tax credit is the most effective way to halt the downward spiral in the housing market and stabilize home prices and financial markets,” said Dunn. “This will get consumers off the fence, stimulate home buying and reduce excess supply in housing markets.”
The bill would also modernize the Federal Housing Administration and provide comprehensive reform for housing government sponsored enterprises Fannie Mae and Freddie Mac. The legislation would also make permanent the higher maximum $729,750 loan limit for Fannie Mae, Freddie Mac and FHA loans that was included in the economic stimulus package passed earlier this year.
“These measures will provide a stable source of consumer-friendly mortgage funding, lower the cost of capital in housing markets and free up more funds for home purchases or to refinance troubled loans,” said Dunn.
The legislation would also make significant enhancements to the Low Income Housing Tax Credit and tax-exempt housing bond programs, which would increase their effectiveness. In addition, it would provide for a temporary increase in state mortgage revenue bond authority to help strapped borrowers seeking to refinance their home loans.
Bush Threatens Veto
Although the House legislation contains many elements espoused by the Administration, including FHA revitalization and a regulatory overhaul for Fannie Mae and Freddie Mac, President Bush said he would veto the legislation as it currently stands.
Specifically, Bush objected to the home buyer tax credit provision and a measure championed by House Financial Services Committee Chairman Barney Frank (D-Mass.) that would allow the FHA to insure up to $300 billion worth of refinanced mortgages if lenders reduce the outstanding principal and make them more affordable for borrowers.
Bush charged that this measure would “reward speculators and lenders” while doing little to relieve the nation’s mortgage crisis. “I will veto the bill that is moving through the House today if it makes it to my desk,” Bush told reporters the day before the House passed its bill.
NAHB Advocacy Efforts
Before the legislation went to the House floor, NAHB sent a letter to the House leadership urging members of Congress to support the bill. Because of the importance of this legislation to the housing industry, NAHB designated support for two amendments dealing with tax and housing policy issues as key votes. The two amendments were subsequently approved with bipartisan support.
As part of the NAHB Legislative Conference on April 30, builders from across the country traveled to the nation’s capital and flooded the switchboards on Capitol Hill calling on Congress to move quickly to avert an economic crisis by passing a housing stimulus package.
In conjunction with its legislative conference, NAHB also conducted a satellite media tour. Several builders in Washington appeared with their congressional representative and were interviewed by media from their home markets to discuss local housing conditions and the need for Congress to take prompt action to shore up housing and the economy.
NAHB Executive Vice President and CEO Jerry Howard was also interviewed to provide a national perspective.
The interviews aired nationally and in 10 local media markets, including Reno, Nev.; Sacramento, Calif.; Waco, Texas; Albuquerque, N.M.; Rochester, N.Y.; Lexington, Ky.; Chattanooga, Tenn.; Des Moines, Iowa; Orlando, Fla.; and northern Pennsylvania.
In addition, Howard and North Carolina builder Rick Judson appeared on CNBC’s Power Lunch to discuss the NAHB Legislative Conference and the association’s housing priorities. Howard was also interviewed by Politico on the same topics.
A May 3 article in the Wall Street Journal highlighted the success of NAHB’s legislative conference. The story noted that 300 personal visits and 1,200 phone calls from NAHB members helped to move forward a sweeping housing stimulus package.
“At the height of the deluge, House Financial Services Committee Chairman Barney Frank (D-Mass.) told the group (NAHB) that the package slated to reach the floor next week would contain most everything they wanted, including a $7,500 first-time home buyer tax credit, effective this year,” the Wall Street Journal story said.
Howard was also quoted in the article. “We made our point," he said. "Legislation languishing for four or five years is finally getting some attention."
House bill H.R. 3221 now must be reconciled with a narrower housing stimulus package that passed the Senate last month.
“Given the current economic climate, Congress needs to act now to enact the best possible legislation to help ailing home owners and shore up home prices. This will pay huge dividends for consumers, housing and the entire economy,” said Dunn.
To read H.R. 3221, click here and enter the bill number in the box at the center of the page.
For more information, e-mail Michael Strauss at NAHB, or call him at 800-368-5242 x8252.
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From the left, Rep. Shelly Moore Capito (R-W.Va.) meets with NAHB President Sandy Dunn, John Brumley and Ellen Walker. |
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Sen. Charles Grassley (R-Iowa) reviews NAHB's housing priorities with a delegation of builders from Iowa. |
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Rep. Dan Boren (D-Okla.), right, and NAHB First Vice President Joe Robson discuss important legislative issues. |
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Builders at the Capitol during the 2008 Legislative Conference. |
Photos by Herman Farrer
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