However, the FHA program does not have separate limits for new and existing homes, which are called for by the Mortgage Revenue Bond statute. And the Treasury has not been able to find a reliable method for producing separate new and existing home safe-harbors for the bond program.
In response to a meeting with the Treasury last November in which NAHB expressed concern over the absence of separate limits for new homes, the IRS earlier this month also indicated that it will consider establishing separate price limits for new housing if data can be provided to support those limits.
NAHB has been working with HUD and the Treasury to establish such data.
On the legislation front, H.R. 284 and S. 595, which were introduced in the Congress last year, would allow states to use 90% of an area’s average home purchase price or three-and-a-half times the median family income as a price limit. These bills also would repeal the 10-year rule, which currently restricts MRB issuers from using principal repayments to fund new loans.
By early this month, 325 members of the Congress had signed on as co-sponsors in the House and 63 in the Senate.
To read the legislation, click here and enter the bill number in the box at the upper left.
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