The National Association of Home Builders (NAHB) is spearheading Fix Housing First, one of the largest coalitions of housing advocates ever assembled in the United States, to push for a housing recovery plan that will revive the economy.
"If we are going to successfully pull our nation out of recession, we must address housing first," said NAHB President and CEO Jerry Howard.
Fix Housing First, which consists of more than 600 organizations, home building companies, and manufacturers and continues to add new members on a daily basis, is pressing for a major stimulus package to stem the decline in home values, stabilize financial markets and reignite consumer demand. To get the economy moving again, the coalition is urging the U.S. Congress to support enhancements to the home buyer tax credit and provide below-market 30-year fixed-rate mortgages for home purchases.
"If Congress enacts a meaningful tax credit, coupled with an aggressive interest rate buy-down program, we are confident that these measures will help to stabilize home prices, prevent future foreclosures, restore consumer confidence and start creating jobs," said Howard.
The coalition cites a similar plan that worked in 1975, when the nation was also in the midst of a recession. Congress then passed a short-term $2,000 tax credit for all new homes ($12,000 adjusted for today's median home prices) along with subsidized mortgage rates. The stimulus jump started the depressed economy and the effects continued long after the measure expired.
"Entering this holiday season, we saw a sobering loss of more than half a million jobs in November, and major job cutbacks among the nation's top employers are being announced daily," said Howard. "We need to put a stop to this dangerous erosion on Main Street before it grows out of control."
The housing stimulus proponents are calling for significant enhancements to the current $7,500 tax credit for first-time home buyers. Among the improvements:
-All primary home purchases between April 9, 2008 and Dec. 31, 2009 would be eligible.
-The credit amount would be increased to 10% of the price of the home, capped at 3.5% of FHA loan limits, bringing the credit to a range of roughly between $10,000 and $22,000.
-The current recapture provision would be eliminated. Repayment would only be required if the home were sold within three years.
- The credit would be available at the time of closing, making it easier to be used as a downpayment.
The second component of the stimulus plan would provide qualified home buyers with 30-year fixed-rate mortgages at 2.99% on contracts closed until June 30, 2009 and 3.99% on closings between June 30 and Dec. 31, 2009.
The coalition has also announced its support for continuing foreclosure prevention measures to keep people in their homes.
To help buyers in California and other high-cost markets, NAHB is also calling on Congress to permanently keep the FHA/Fannie Mae and Freddie Mac conforming loan limits at $729,750. Under current law, the loan limits for high-cost areas will be reduced to $625,500 on Jan. 1, 2009.
For more information, visit www.fixhousingfirst.com.
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