NAHB Wants Larger Home Buyer Credit

Washington, DC, Jan. 14, 2009--As Congress considers releasing the second half of the Treasury's $700 billion Troubled Asset Relief Program (TARP), the National Association of Home Builders (NAHB) urged lawmakers to use a portion of the funds to stem the rising tide of foreclosures and increase the flow of credit for housing production. NAHB also urged passage of legislation to stimulate housing demand.

"Up to this point, the TARP program has failed to expand the flow of credit to business and consumers on competitive terms," NAHB Chairman-elect Joe Robson, a home builder from Tulsa, Okla., said in testimony before the House Financial Services Committee.

"In addition the TARP program has not adequately responded to the nation's foreclosure crisis, which must be addressed to keep people in their homes, help stabilize home prices and promote recovery of the housing market and economy."

NAHB supports foreclosure prevention measures advocated by Federal Deposit Insurance Corporation Chairman Sheila Bair, which would use $24 billion of the funds Congress authorized for the TARP to provide loan guarantees to achieve greater success in foreclosure mitigation efforts. FDIC estimates that the program could help about 1.5 million home owners to avoid foreclosure.

With falling home values at the core of the current economic crisis, Robson said that foreclosure relief absent a plan to address demand for housing will not succeed in fixing the nation's housing and economic woes.

Specifically, Robson urged Congress to enact NAHB's proposal to boost housing demand by providing a bigger and better home buyer tax credit and offering below-market fixed-rate mortgages on home purchases, which would increase home sales by 1.1 million in 2009 and create more than 539,000 jobs.