Key provisions contained in the bill:

• FHA Modernization – the FHA loan limit is increased from 95% to 110% of area median home price with a cap at 132% of GSE limit (currently, $550,000).  Downpayments of 3.5% will be required for any FHA loan and counseling requirements are increased.
• Home Buyer Tax Credit – creates a $7,000 tax credit for buyers of foreclosed homes, to be claimed over two years Additional CDBG Funding – the CDBG program is provided with an additional $4 billion in supplemental funds to be used for the purchase and rehabilitation or redevelopment of foreclosed homes.    
• Additional Mortgage Revenue Bond (MRB) Allocation – a special allocation of $10 billion of Federal tax-exempt private activity bond authority is provided to the states.  Interest earned on the bonds would be exempt from the alternative minimum tax.  An amendment from Senator Snowe was added to the final manager's amendment to ensure that small states would receive an allocation of bonds as they currently do under the existing MRB program.
• Extension of Net Operating Loss Carryback – extends the "net operating loss (NOL) carryback" from two to four years for 2008 and 2009.   

Yesterday, the House Ways and Means Committee, on a bipartisan vote of 35 – 5, passed a bill that combines several housing stimulus provisions and provisions to modernize the Low Income Housing Tax Credit and tax-exempt housing bond programs.  On the housing stimulus side, the bill creates a $7,500 first-time home buyer tax credit for the purchase of any home within the next 12 months and provides for a special allocation of tax-exempt housing bonds to be available for refinancing existing mortgages and for new mortgage lending.  While, timing for House floor action is unclear, the tax portion will likely be combined with the bill that comes out of the House Financial Services Committee, perhaps by the end of the month.  Following House action, the House and Senate will begin the process of reconciling the two bills during conference negotiations.  We will continue to work on a bipartisan basis to develop the most effective housing stimulus possible. 

Please stay tuned for more action on this issue once it comes to the House floor. 

If you have any questions, please email us at builderlink@nahb.com.