For Immediate Release
April 9, 2008 |
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FOR MORE INFORMATION:
Cullen Schwarz
Office: 202.225.4961
Mobile: 202.225.0471 |
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Ways and Means Committee Approves Housing Bill |
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Provision Authored by Rep. Levin Would Help Stabilize Credit Markets and Make Public Projects More Affordable for Local Communities |
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(Washington D.C.)- A wide bipartisan majority of the House Committee on Ways and Means today approved legislation to help alleviate the national housing crisis. The Housing Assistance Tax Act of 2008 would provide tax credits to first-time homebuyers, improve access to low-income housing and allow families to deduct property taxes, as well as a provision authored by Congressman Sander Levin to relieve pressure on credit markets and make public projects more affordable for local communities. The package will help bring stability to the housing market while assisting families in the purchase of their first home and improving access to affordable housing. The legislation is designed to complement efforts by the House Committee on Financial Services to address the growing rate of foreclosures nationwide.
“To fully address the mortgage crisis, Congress must provide relief to homeowners and new home buyers, not just address problems in the financial markets,” said Rep. Levin. “This package of legislation will help to address the problems in our housing markets, which are central to the weakening economy.”
The provision authored by Rep. Levin will help make local governments, squeezed by declining revenues and higher borrowing costs, better able to afford a wide variety of public projects including road repairs or school and hospital expansions. Levin’s provision would allow Federal Home Loan Banks to guarantee tax-exempt bonds, reducing borrowing costs for municipalities. The provision is endorsed by numerous mayors, municipalities and community development groups, as well as the American Hospital Association, American Bankers Association and National Association of Homebuilders.
“Allowing the Federal Home Loan Banks to insure tax-exempt municipal bonds will help restore stability to the municipal credit market, allowing communities to continue making critical investments and relieving some of the pressure on credit markets generally,” said Rep. Levin. “In light of the problems facing the bond insurance industry, which has been damaged by its exposure to subprime mortgage securities, this legislation is more necessary than ever.”
Another provision of the legislation will expand states’ authority to issue tax-exempt housing bonds. Governor Jennifer Granholm signed legislation last week to allow the Michigan Housing Development Authority (MSHDA) to refinance existing mortgages at competitive rates for homeowners with credit trouble, and this legislation would allow MSHDA to use the proceeds from tax-exempt bonds for the new refinancing program, resulting in lower interest rates for homeowners.
The Housing Assistance Tax Act of 2008 will likely come before the full House of Representatives in the coming weeks.
Along with Rep. Levin’s provision, the main provisions included in the Housing
Assistance Tax Act of 2008 include:
- First-time homebuyer tax credit to assist in making a down payment on a home. This would provide individuals and families with a refundable credit (equivalent to an interest-free loan) of ten percent of the purchase price of their home (up to $7,500). Taxpayers would be required to repay any amount received under this provision to the government over 15 years in equal installments. The credit will be phased out for taxpayers with adjusted gross income in excess of $70,000 ($110,000 in the case of a joint return).
- Additional standard deduction for real property taxes to help homeowners who claim the standard deduction by allowing them to claim an additional standard deduction of up to $350 ($700 for joint filers) for State and local real property taxes. This provision applies for 2008.
- Temporary increase in low-income housing tax credit and simplification of the credit. This provision would increase the current annual limit of Federal-low income housing tax credits that each state may allocate from $2.00 to $2.20 per resident. This will help put builders to work to create new options for families seeking affordable housing alternatives. The credit will also be simplified to improve its effectiveness.
- Temporary increase in mortgage revenue bonds to allow for the issuance of an additional $10 billion of tax-exempt bonds to refinance subprime loans, provide loans to first-time homebuyers and to finance the construction of low-income rental housing.
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To Contact Congressman Levin: -
Email Congressman Levin In Michigan: 27085 Gratiot Ave, Roseville, MI 48066 | (586) 498-7122 | (248) 968-2025
In Washington: 1236 Longworth House Office Building, Washington, DC 20515 | (202) 225-4961
