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The Obama administration’s top economist and housing czar have joined forces to persuade lawmakers to pass three key measures they said would further “stabilize the housing market.”
Treasury Secretary Tim Geithner and HUD Secretary Shaun Donovan released a joint statement Thursday urging Congress to extend the popular First Time Homebuyers Tax Credit, secure funding for the planned Housing Trust Fund, and retain higher loan limits for federally backed home mortgages.
“These three measures provide comprehensive support to our recovering housing market and continued access to affordable housing,” Donovan told the legislators. “While extending the tax credit and higher loan limits will help promote homeownership, funding the Housing Trust Fund will provide assistance to renter households impacted by the economic crisis.”
Geithner and Donovan struck a favorable chord with housing industry groups, particularly on the extension of the current higher loan limits on Fannie Mae, Freddie Mac, and Federal Housing Administration mortgages.
Representatives of the Mortgage Bankers Association, the National Association of Home Builders, and the National Association of Realtors sent House leaders a letter Thursday, praising the higher limits as “a key component of the economic recovery efforts because they help make affordable loans available” for a greater number of prospective homebuyers.
“Even though the temporary limits do not expire until the end of this year, obtaining financing is already becoming more difficult and expensive for many borrowers,” the letter said. “Therefore, we request Congress extend the limits as soon as possible so as not to jeopardize the fragile recovery.”
The trade groups also agreed with the administration on an extension of the Homebuyers Tax Credit, which is set to expire on November 30. The $8000 incentive has widely been praised for stimulating sales of housing stock and stabilizing market values that had seen big drops in the recent U.S. economic downturn.
“This credit has brought new families into the housing market and contributed to three consecutive months of rising home prices nationwide,” Geithner and Donovan said Thursday in calling for its renewal for a “limited period.”
“In extending the credit, we urge Congress to include strict measures to combat tax fraud and protect responsible homeowners,” they added.
The third measure seeks to pin down funding for the Housing Trust Fund, which was created by Congress last year to assist very low-income families find adequate housing. “While the president’s budget proposed to fund the Housing Trust Fund for $1 billion, and fully offset it within the budget, today the administration is announcing that it will actively work with Congress to identify a specific offset to assure that level of financing for the fund,” Geithner and Donovan said.
There is no indication of when Congress might take up the three proposals for consideration and voting. Several key senators, however, expressed their support this week for the extension of the Homebuyer Tax Credit, suggesting that measure would likely pass swiftly once brought to the lawmakers’ floor
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