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First-Time Home Buyer Tax Credit May 8, 2008

Posted by Reginald Johnson in Business, Government, Housing-Market, U.S. Congress.
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(Also check out: Senate Passes Housing Measure)

The letter below was sent by the NAFCU (National Association of Federal Credit Unions) in reference to establishing a resolve in this poorly regulated housing industry. The non-profit sent the letter to Chairman Barney Frank that outlined H.R. 3221.

The bill has passed the House and the Senate and may now proceed to a conference committee of senators and representatives to work out differences in the versions of the bill each chamber approved.

The bill then goes to the President before becoming law. In looking at how the housing market presently is, it seems fairly certain that it will be made into law soon.

On May 8 th, Chairman Frank asked for unanimous consent. This allows the Clerk be authorized to make technical corrections in the House amendments to the Senate amendments to H.R. 3221. Fortunately, it was agreed to without objection.
The bill appears to be an effort to soothe a struggling housing market. It definitely shows that Congress is trying to help out those who voted them in office. With this turbulent businesses weather the country has endured over the past several months, it shows there may be some light at the end of the tunnel.

From what I can view, the most intriguing part of the Foreclosure Prevention Act is not for homeowners, but for home buyers. This is because the bill proposes a $7,000 tax credit for people who buy foreclosed properties. It becomes a win for the first-time home buyer and a win for the entity that owns the foreclosure.

Several great homes have been foreclosed on – and so the opportunutly of landing a good home is possible. Some people have acquired some nice homes due to foreclosures.

Another thing this bill includes is $4 billion in grants for communities to buy and fix up abandoned houses. This is something that many local churches and faith-based agencies are doing.

For a few real estate investors the proposed tax credit gives even more incentive to purchase foreclosures. If you don’t mind taking on a have long term goal of ‘buying and holding’ a residence, the opportunities are endless. There are many desperate sellers looking to cash in quickly. Many are looking at this as an opportunity to invest in fixing up their cities and neighbourhoods.

One of the main things that Congress needs to consider is developing a bill does more for homeowners facing foreclosure. This bill actually does that. One portion of the Foreclosure Prevention Act dedicated to struggling homeowners is $150 billion for pre-foreclosure counseling and stronger loan disclosure guidelines. It also calls for new FHA measures, which would allow more homeowners to refinance into the government-backed FHA loans.

HR 3221 also includes funding in the form of tax breaks for homebuilders and other businesses which are facing losses as a result of the down economy.

The bill will more than likely see several more changes to address current homeowners who may be facing foreclosure. Whatever you see now, maynot be what’s finalized in the next couple of months. Keep in mind, there are several other proposed plans which could be meshed into the Foreclosure Prevention Act before it reaches the President for signing.

If you would like to learn more about the organisation, check out there website: http://nafcu.org

______________________________


May 7, 2008

The Honorable Barney Frank

Chairman

House Financial Services Committee

2128 Rayburn House Office Building

U.S. House of Representatives

Washington, DC 20510

Re: Housing Reform Legislation

Dear Chairman Frank:

On behalf of the National Association of Federal Credit Unions (NAFCU), the only national trade association that exclusively represents the interests of our nation’s federal credit unions, I am writing in conjunction with the consideration of H.R. 3221. NAFCU supports your work to address the critical issues facing our nation’s housing market. We urge the House to add the text of H.R. 5830 which would reform the Federal Housing Administration (FHA) and the text of other bills to H.R. 3221 to create a solid legislative package.

NAFCU believes that the creation of a temporary, first-time home buyer tax credit for the purchase of any home is a positive step to help the housing market. Additionally, we support the efforts in H.R. 5830 (to be added to H.R. 3221 as part of House Amendment #1) that would modernize the FHA and provide additional tools and flexibility to address housing finance needs. We also believe that a permanent increase in FHA loan limits is a positive step in this legislation. The current FHA framework and regulatory burdens serve to discourage many credit unions from becoming FHA-approved lenders. We believe this legislation will help address the concerns of credit unions and encourage more credit unions to become FHA-approved lenders.

Additionally, NAFCU supports Title III of House Amendment #1 to H.R. 3221, which would again attempt to move the language from H.R. 1427, the GSE reform bill, forward. Homeownership is a core American value and our members are proud of the role that credit unions have come to play in recent years – in conjunction, with Fannie Mae, Freddie Mac and the Federal Home Loan Banks (collectively the GSEs”) in helping an ever increasing number of Americans achieve the dream of owning their own home.

NAFCU recognizes that GSE-reform is a multi-faceted issue, and we are pleased to see that H.R. 1427 addresses our concerns in four specific issues in which our member credit unions have a particular interest: the need for an independent GSE regulator, prior program approval, limits on portfolio holdings, and minimum capital levels.

Finally, we have concerns that some have proposed amendments that could weaken federal pre-emption on aspects of this legislation. We caution that these efforts, while well-intentioned, could potentially have a negative impact on federally chartered institutions in certain states and should not be adopted without further study and examination.

Thank you for the opportunity to share NAFCU’s views on these important issues. If you have any questions or if we can be of further assistance to you or your colleagues in the consideration of H.R. 3221 please do not hesitate to contact me or NAFCU’s Director of Legislative Affairs, Brad Thaler at (703) 522-4770.

Sincerely,

Fred R. Becker, Jr.

President/CEO

cc: The Honorable Nancy Pelosi

The Honorable John Boehner

The Honorable Steny Hoyer

The Honorable James Clyburn

The Honorable Roy Blunt

The Honorable Spencer Bachus

Comments»

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