NAHB Supports Home Buyer Tax Credit

Washington, DC, June 26, 2008--The National Association of Home Builders has abandoned its support of a controversial provision in the Senate-passed bill that would have allowed builders to carry back their losses two additional years.

The provision could have saved the industry, especially big builders, $25 billion by allowing builders to recoup taxes paid when business was booming.

Instead, NAHB has decided to focus on the passage of a broad home buyer tax credit.

House-passed legislation includes a $7,500 credit for first-time home buyers that would have to be repaid to the government within 15 years. The Senate bill would enact a $7,000 credit to purchase homes in foreclosure for one year. The home buyer tax credit, the NAHB says, would do the most to help the industry.

The concession comes as the NAHB mounts an all-out effort to try to get legislation passed before Congress’s July 4 recess, figuring that there won’t be much time to act after it returns.

The House and Senate need to reconcile some differences between the bills that passed their respective chambers. But the president has promised to veto legislation and it's not clear if there is sufficient support to override a veto.

The House and Senate bills have several basic provisions in common. They provide a special $10 billion allocation of mortgage revenue bonds for new-home purchases and refinancing, allow the Federal Housing Administration (FHA) to insure mortgages written in high-cost areas, overhaul the regulation of Fanny Mae, Freddie Mac, and the other government-sponsored enterprises (GSEs), and expand the Low Income Housing Tax Credit program.

In “An Open Letter to Congress” ad, NAHB President Sandra Dunn, a builder from West Virginia, writes that “The landmark housing stimulus legislation now before both the House and Senate would help end the downward housing spiral that is the biggest threat to the health of our economy.”