Congressional Housing Measures

Homebuyer Tax Credit and Housing Legislation Pass Senate, Move to House
The proposed $8000 homebuyer tax credit and the FHA and GSE reform and mortgage rescue legislation (H.R. 3221) has passed the Senate and now goes back to the House for what legislators hope will be a binding revision that can pass the House and Senate before the end of July. This "ping pong" effect arises because some Senate Republicans have lodged formal objections to the usual process of taking two differing versions of the bill to a House-Senate conference.
The House and Senate versions of the housing bill are now in very close alignment, with only a few issues to be resolved. Many of the issues revolve around the question of whether the bill will be "paid for." The major focus of the pay-for problem is the provision in the Senate package that would authorize $4 billion for grants to local governments where communities have been particularly hard-hit by foreclosures. The grants would be made under the Community Block Development Grant program (CDBG). These CDBG provisions are not "paid for." House Blue Dogs (fiscally conservative Democrats) insist that it be paid for. House Republicans, including President Bush, oppose the CDBG provision altogether. President Bush has threatened to veto the bill, in part because of the CDBG provision. Accordingly, the House has the choice of deleting the grant provisions or finding other, offsetting spending cuts.
Speaker Pelosi (D-CA) also hopes to maintain the 2008 high cost limits of $729,000, while the Senate has agreed to limits up to $625,500 for both the GSEs and FHA. While NAR continues to work for higher limits, it is important to note that even $625,500 is significantly higher than the $550,440 originally passed by the Senate Banking Committee. REALTOR response to a recent NAR call-to-action was critical to the increase.
Finally, additional tax revenues are needed to close a gap on the tax package. A non-real estate provision has been identified and will likely be added in this final House package, as well. The tax provisions themselves are not likely to be modified in the House.
Financial Services Committee Chairman Frank (D-MA), the architect of the housing and financial reforms, anticipates that the House can finish its work by July 18. If the bill does pass the House by then, the Senate should have adequate time to cast the final vote and send the package to the President for signature by the end of July.
To view a side by side chart comparing the House and Senate tax provisions, click here. For more information, contact Linda Goold with NAR at 202-383-1083.