DAILY REAL ESTATE NEWS | THURSDAY, MAY 16, 2013
- Preserve the MID and other housing tax incentives, including the capital-gains exclusion on the sale of a principal residence and the property-tax deduction.
- Protect the FHA’s ability to meet its mission of helping responsible households that need its financing to buy a home.
- Pave the way for the return of private capital to the secondary mortgage market while preserving an explicit, not-for-profit, government-chartered federal presence in the market.
NAR Tax Counsel Evan Liddiard said the conditions are the best they’ve been in almost two decades for Congress to tackle sweeping tax reform, so the MID and other incentives will be part of the discussion. Liddiard said that even if the two houses of Congress can’t craft legislation that can pass both houses, if any paring back of home ownership incentives is included in bills that at least make it through one house or another, that sets a precedent that will make it easier in later years for harmful changes to pass. “We have to head this off now,” he said. One argument members of Congress might make in favor of paring back the MID is that they need that tax cut in exchange for lowering tax rates, which would help households across the board. But because there’s no guarantee that Congress won’t turn around in a few years and raise the tax rates again, that’s not an argument that makes sense, said Giovaniello. “Once we give up something on [the] MID, we won’t get it back,” he said. On the FHA, which has seen its reserves take a hit in recent years, REALTORS® will be carrying the message that the agency has been the unsung hero of the country’s economic recovery. It stepped up to the plate during the housing downturn and made lending possible at a time when there were few other options. Had it not done that, the country would be in a tougher place right now. And in any case, the agency’s finances are quickly improving and could soon be in positive territory once again. “The FHA is a counter-cyclical program,” NAR Policy Analyst Megan Booth said. “Its role is to step up when other sources of funding won’t, so it did its job.” Legislation could be coming down the pike that might seek to require borrowers to come with a higher down payment or to pay higher insurance premiums or to meet certain income qualifications, said Booth. each of these provisions would be devastating to the agency’s mission and needs to be resisted, she said. The main message on reform of the secondary mortgage market is that a continued federal presence, explicit and on a nonprofit basis, is essential for the preservation of the widespread availability of 30-year, fixed-rate mortgages. Private lenders without that federal backstop simply won’t make safe, long-term financing available on a widespread basis. “We’re going to hold members accountable for how they vote on these issues,” Giovaniello said. “That’s one of the messages we need to take to Capitol Hill. We’re watching what they do.” To reinforce the message, REALTORS® will be wearing badges on lanyards that carry a simple message: “Home ownership is not a loophole.” Over the next two days, that message will be out in force on Capitol Hill. –Robert Freedman, REALTOR® Magazine Read more Don’t Get Caught Flat-Footed on MID, REALTORS® Warned REALTORS®: On the Right Path, Ready for Action Inertia Might Win Out in Secondary Mortgage Market Reform http://realtormag.realtor.org/daily-news/2013/05/16/new-lawmakers-mean-new-challenges-home-ownership