Builders Laud House Passage of Housing Bill, Urge Congress to Move Quickly to Finish the Job

WASHINGTON--(BUSINESS WIRE)--The National Association of Home Builders (NAHB) today applauded House passage of H.R. 3221, the American Housing Rescue and Foreclosure Prevention Act. The bill would help struggling borrowers and boost the ailing housing market and faltering economy.

“Last week, more than 1,200 home builders delivered an urgent message to Congress to enact legislation to jump-start housing, save jobs and restore confidence. 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,” said NAHB President Sandy Dunn, a home builder from Point Pleasant, W.Va.

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 when the bill is enacted into law and expire in April 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.

“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 (LIHTC) 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.

The House bill would also allow the FHA to insure up to $300 billion worth of refinanced loans if lenders first reduce the outstanding principal to make them more affordable for borrowers.

The House legislation must now 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.

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ABOUT NAHB: The National Association of Home Builders is a Washington, D.C.-based trade association representing more than 235,000 members involved in home building, remodeling, multifamily construction, property management, subcontracting, design, housing finance, building product manufacturing and other aspects of residential and light commercial construction. Known as "the voice of the housing industry," NAHB is affiliated with more than 800 state and local home builders associations around the country. NAHB's builder members will construct 80 percent of the more than 1.08 million new housing units projected for 2008.