Congress Passes Tax Credit Extension/Expansion

I just got this exciting email!


To: All REALTORS®

From: Charles McMillan, 2009 NAR President

Date: November 5, 2009

Re: Congress Passes Tax Credit Extension/Expansion

Dear Fellow REALTOR®,



I am VERY excited to report that Congress has answered our call to extend and expand the homebuyer tax credit!



Both the House and the Senate have passed an unemployment insurance bill, which includes an amendment that expands and extends the tax credit. That bill will be sent to President Obama for his signature in the next day or so.



I have recorded a special edition of my President’s Podcast, with details on the new tax credit and when it takes effect. Please take just a couple of minutes to listen.






We also have posted a comparison chart on Realtor.org. This can be a helpful resource as you work with buyers to take advantage of the credit in the months ahead.







On behalf of NAR, I thank you all for your participation in our advocacy efforts on this issue. Not only did we set a new record on responses to Calls for Action, but we helped move another step closer to a brighter future for America’s families and our economy.



Sincerely,




Charles McMillan, CIPS, GRI
2009 NAR President

r emails, please add NAR@newsletters.realtor.org to your address book now.

Questions or comments? Please send an email to presidentsreport@realtors.org.

National Association of REALTORS®
MandBD
430 N. Michigan Ave.
Chicago, IL 60611
--------------------------------------------------------------------------------

TELL CONGRESS TO EXTEND THE HOMEBUYER TAX CREDIT!

Extend the Homebuyer Tax Credit to Assure America’s Economic Recovery

The tax credit is working, homebuyers are using it, sales have increased and it’s helping to move both housing and the economy forward.

But time is running out. Homebuyers have only a few weeks left to put in a contract on a house and benefit from the tax credit—it expires on December 1. Congress should extend the tax credit until December 31, 2010 to allow more homebuyers to take advantage of this incentive and help America’s economy continue to recover.

The first-time homebuyer tax credit is working:

*
Home sales to first-time homebuyers increased by 25% in 2009 and now account for 50% of all sales.
*
The tax credit is reducing the inventory of foreclosures that are sitting on the market, helping our neighborhoods and communities recover.
CLICK HERE TO HAVE YOUR VOICE HEARD

Making Home Affordable Program

On February 18, 2009, President Obama announced his Making Home Affordable Program (MHA), designed to help up to 7-9 million families avoid foreclosure by restructuring or refinancing their mortgages. In doing so, the plan not only helps responsible homeowners behind on their payments or at risk of defaulting, but prevents neighborhoods and communities from being pulled over the edge too, as defaults and foreclosures contribute to falling home values, failing local businesses, and lost jobs.

For more detailed information, visit MakingHomeAffordable.gov.
Making Home Affordable Program (MHA):
Guidelines and Latest News

The Plan
On March 4, 2009, the Obama Administration announced new U.S. Department of the Treasury guidelines to enable servicers to begin modifications of eligible mortgages under the Administration's Making Home Affordable Program (MHA) – announced by President Barack Obama on February 28, 2009.
NAR's Detailed Summary of the Obama Housing Plan> (PDF: 112K)
Key Components of the Plan>


Modification of Second Mortgages
On April 28, 2009, the Treasury Department announced an expansion of the Making Home Affordable Program (MHA) to help reduce payments on second mortgages.

Modification of Second Mortgages under the Making Home Affordable Program> (Treasury Dept.)


Financial Incentives and Uniform Process for Short Sales - The Foreclosure Alternatives Program (FAP)
On May 14, 2009, Treasury Secretary Geithner and HUD Secretary Donovan announced new details on the Making Home Affordable Program to help homeowners facing foreclosure.

Treasury Department press release> (Treasury Dept.)

Realtors® Help Buyers, Sellers Navigate Short Sales>

Uniform Process for Short Sales Will Help Struggling Home Owners>

View detailed guidelines> (PDF: 316K)

Treasury's FAP factsheet> (PDF: 44K)


Visit the Treasury Department links below for the latest guidelines and information:

Making Home Affordable - Summary of Guidelines> (PDF: 53K)

Borrower Information: Making Home Affordable Refinance and Modification Options

Borrower Q&As> (PDF: 82K)

Housing Counselor Q&As> (PDF: 72K)

Modification Program Guidelines> (PDF: 90K)

Fact Sheet - Updated Detailed Program Description> (PDF: 73K)

Modification of Second Mortgages under the Making Home Affordable Program>

New Details of the Program to Help Homeowners Facing Foreclosure>

Fact Sheet - The Foreclosure Alternative Program (FAP)> (PDF: 44K)

Making Home Affordable Progress Report, May 14, 2009> (PDF: 20K)


Fannie Mae and Freddie Mac Guidelines
Fannie Mae and Freddie Mac released guidelines on refinancing and loan modification options that implement President Obama's Making Home Affordable Program.

GSEs Home Affordable Refinancing Programs>

GSEs Home Affordable Modification Programs>


Determining if a borrower's loan is owned or securitized by Fannie Mae or Freddie Mac:

For Fannie Mae, 1-800-7FANNIE (8am to 8pm EST).

www.fanniemae.com/loanlookup

Freddie Mac, 1-800-FREDDIE (8am to 8pm EST)
www.freddiemac.com/avoidforeclosure

American Recovery and Reinvestment Act of 2009

H.R. 1, the “American Recovery and Reinvestment Act of 2009,” passed the House on February 13, 2009, by a vote of 246 - 184. The Senate also passed the bill later that day. The President is expected to sign the bill soon. The bill is a $780 billion package, with roughly 35% of the package devoted to tax cuts (mostly for 2009) and the rest to spending intended to occur in 2009 and 2010.
View how the U.S. House of Representatives voted>

The mix of provisions of interest to REALTORS® changed frequently throughout the legislative process, with changes continuing to be made just hours before the measure was released prior to the vote. In the end, the elements of NAR’s housing agenda were included. Congress and the President have announced that a finance and housing package (including tax provisions) will be the next “big” initiative, so Congress has by no means finished its work as it affects the housing industry and REALTORS®.

The bill includes the following provisions:

Homebuyer Tax Credit
FHA, Fannie Mae and Freddie Mac Loan Limits
Neighborhood Stabilization
Commercial Real Estate
Rural Housing Service
Low Income-Housing Grants
Tax Exempt Housing Bonds
Energy Efficient Housing Tax Credits & Grants
Transportation Investments
Broadband Deployment

Homebuyer Tax Credit – The bill provides for a $8,000 tax credit that would be available to first-time home buyers for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009. The credit does not require repayment. Most of the mechanics of the credit will be the same as under the 2008 rules: the credit will be claimed on a tax return to reduce the purchaser's income tax liability. If any credit amount remains unused, then the unused amount will be refunded as a check to the purchaser.
Chart Highlighting the Major Modifications to the First-Time Homebuyer Tax Credit> (PDF: 309K)
Back to top

FHA, Fannie Mae and Freddie Mac Loan Limits -The bill reinstates last year's 2008 loan limits for FHA, Freddie Mac, and Fannie Mae loans. These limits were equal to the greater of 125% of the 2008 local area median home price or $271,050 for FHA and $417,000 for Fannie and Freddie, with an overall maximum cap of $729,750. For the few areas where the 2009 limits were higher, the higher limits will apply. In addition, the bill includes language providing the HUD Secretary with the discretion, if warranted, to increase the loan limit for any “sub-area”, i.e.an area smaller than a county. The Secretary's discretion is again limited by the $729,750 cap. These 2009 limits will expire December 31, 2009.

The inclusion of these loan limit provisions in the final bill is a victory for homeowners, buyers and Realtors. While these new limits were included in version of the original stimulus bill approved by the House, the bill first approved by the Senate did not. NAR's Call for Action to both the House and the Senate prior to the final vote advocated strongly for the provisions which were then included in the final bill approved by both Chambers.

Estimated 2009 FHA, Fannie Mae and Freddie Mac Loan Limits> (PDF: 1.3M)
Back to top

Neighborhood Stabilization – Division A, Title XII of the bill provides $2,000,000,000 in additional funding for the Neighborhood Stabilization Program (NSP). The NSP was created by the Housing and Economic Recovery Act of 2089 (Public Law 110–289) to provide grants through the Community Development Block Grant program (CDBG) to states and localities to address the problems that can be created when whole neighborhoods are decimated by foreclosures. The funds can be used to purchase, manage, repair and resell foreclosed and abandoned properties. In addition, the funds can also be used by states and localities to establish financing methods for the purchase and redevelopment of foreclosed properties. After purchase the homes must be used to assist individuals and families with incomes at or below 120% of area median income. Twenty-five percent of funds must be used for households with incomes at or below 50% of area median income. By leveraging their expertise in partnership with others from both the public and private sector, Realtors® in many communities have been making important contributions to their local communities’ neighborhood stabilization programs.
Back to top

Commercial Real Estate - Commercial real estate is impacted primarily through those provisions of the bill focused on green building and energy efficiency as well as business tax incentives. H.R. 1 provides significant funds for state energy programs, which could be used to support commerical property owners' investment in energy efficiency upgrades while commercial property owners seeking to invest in alternative energy systems for onsite power generation would benefit from the Department of Energy Renewable Energy Loan Guarantees Program. Of particular benefit to small businesses would be certain provisions of the bill that provide tax relief in the area of bonus depreciation and capital expenditures, as well as the 5-Year carryback of net operating losses for small businesses.
Back to top

Rural Housing Service

Rural Housing Service – The bill provides an additional $500 million to existing USDA Rural Housing programs. The RHS provides both a guaranteed loan program and a direct housing loan program for those meeting the program’s eligibility criteria. The direct loan program will receive $270 million while $230 million will be allocated for unsubsidized guaranteed loans. It has been reported that this level of funding would provide for an additional 192,000 homeowners.
Back to top

Low Income Housing Grants - Allow states to trade in a portion of their 2009 low-income housing tax credits for Treasury grants to finance the construction or acquisition and rehabilitation of low-income housing, including those with or without tax credit allocations.
Back to top

Tax-Exempt Housing Bonds - Tax-exempt interest earned on specified state and local bonds issued during 2009 and 2010 will not be subject to the Alternative Minimum Tax (AMT). In addition, financial institutions will have greater capacity to purchase tax-exempt state and local bonds.
Back to top

Energy Efficient Housing Tax Credits & Grants - To promote green jobs and energy independence, ARRA invests significantly in efforts to make homes and buildings more energy efficient. The bill provides state and local governments with $6 billion in energy efficiency and conservation grants for energy audits, retrofits and financial incentives. Through 2010, homeowners will be able to claim a 30% tax credit (up from 10%) for purchases of new furnaces, windows and insulation. Another $5 billion will be available to modernize the nation’s electricity grid and install smart meters on homes that help to save consumers money. There is also $5 billion for weatherization assistance for low income households and $2 billion for federally assisted housing (section 8) efficiency efforts.
Back to top

Transportation Investments - The bill provides $46.7 billion to states and localities for capital investment for surface transportation projects including highways, bridges, transit, and rail projects. NAR policy supports increased spending on the types of transportation infrastructure addressed in the bill with the exception of Amtrak and high-speed inter-city rail where NAR has no policy. These investments will tend to moderate traffic congestion and support a variety of transportation alternatives which will improve the quality of life of American communities and bolster the value of real estate.
Back to top

Broadband Deployment - The bill creates $7.2 billion in grants to promote broadband deployment in unserved and underserved areas and for mapping the availability of broadband service in the U.S. Any entity is eligible to apply for a grant including municipalities, public/private partnerships and private companies as long as they comply with the grant conditions. The grants are subject to “network neutrality” requirements to ensure that broadband networks be free of restrictions on content, sites, or platforms, on the kinds of equipment that may be attached, and on the modes of communication allowed.

The bill also charges the FCC is with developing a national broadband plan that shall seek to ensure that all Americans have access to broadband capability and shall establish benchmarks for meeting that goal.

These provisions are important victories for REALTORS because increased broadband access promotes economic growth and expands opportunities for home sales. A 2006 Commerce Department report determined that property values are 6% higher in communities where broadband is available.

provided by Realtor.org

House Bill Aims to Stabilize Housing, Addresses Foreclosures and Stimulus

A bill that embraces the need for righting the housing market—the first big step toward economic recovery—was introduced Friday in the U.S. House of Representatives.

Washington, January 09, 2009

H.R. 384, The TARP Reform and Accountability Act, was offered by Rep. Barney Frank (D-Mass.), chair of the House Financial Services Committee. The bill would require the Treasury Department to develop a program, outside the Troubled Asset Relief Program, to stimulate demand for home purchases and lower property inventories, by making affordable mortgages available for qualified buyers through interest rate buydowns, a priority of the National Association of Realtors®.

The measure would amend the TARP provisions of the Emergency Economic Stabilization Act of 2008 to make significant steps to reduce foreclosures, strengthen accountability and close loopholes. Treasury could consider the impact of areas with the highest inventories of foreclosed properties.

NAR President Charles McMillan was heartened by the legislation that would move the housing market forward. “The bill proposed by Chairman Frank is an important first step toward launching a real estate recovery. Housing has always led this country out of economic downturns, and this bill recognizes that the key to bolstering the overall economy is creating stability in the real estate markets. With foreclosure relief, improving the Hope for Homeowners Plan, and expanding TARP to support commercial real estate loans and commercial mortgage-backed securities, this legislation will help create housing stability.”

“By directing the Treasury Department to increase the availability of affordable mortgages rates for qualified home buyers and to offer reduced rate loans designed to stimulate demand for home purchases and clear inventory of properties, Chairman Frank has responded to the most critical issues facing potential homeowners," McMillan said.

Foreclosure relief, using the second half of the $700 billion previously authorized by Congress, would be conditioned on stipulation that $50 billion be used for foreclosure mitigation and calls for a plan to be put into action by March 15. That would allow the Treasury to begin committing the remaining TARP funds for the plan no later than April 1.

The plan would require that foreclosure assistance must apply only to owner-occupied residences. Further, the bill would provide liability protection for loan servicers who engage in loan modifications. Such servicers would have to report regularly to the Treasury.

In addition, the Treasury would be authorized to provide support for commercial real estate loans and commercial mortgage-backed securities, an NAR priority.

NAR has been urging the incoming Obama administration, as well as Congress, to address critical housing needs. “This legislation is a great beginning, but more needs to be done. We must continue to bring potential homebuyers into the market by ensuring low mortgage interest rates, making the higher 2008 conforming loan limits permanent, and applying the $7,500 tax credit to all homebuyers and making it non-repayable,” McMillan said.