NAR backs expansion of buyers' tax credit

Pushing for passage of a massive, $900 billion-plus stimulus bill, President Obama today said, "It is inexcusable and irresponsible for any of us to get bogged down in distraction, delay or politics as usual while millions of Americans are being put out of work. Now is the time for Congress to act."

A $15,000 tax credit that was added as an amendment (by U.S. Sen. Johnny Isakson, R-Ga.) to the stimulus package Wednesday is popular with homebuilders, The Wall Street Journal reports, but adds about $35 billion to the cost of the stimulus plan.

The Washington Post reports that a bipartisan group of about 20 moderate senators was "trying to hammer out a compromise that would attract more Republican support by cutting roughly $100 billion from the bill."

Senate Majority Leader Harry M. Reid, D-Nev., has expressed optimism that a vote will be held today on the spending plan.

The tax credit, as initially proposed, could be used only in the purchase of primary residences and there is no repayment requirement (unlike the $7,500 tax credit passed last year, which did have a repayment requirement), according to reports. And the actual amount of the tax credit proposal would be $15,000 or 10 percent, whichever is less.

"The world is waiting to see what we're going to do in the next 24 hours," Reid said in a statement about the stimulus legislation, The Associated Press reports.

In statements this week, the National Association of Realtors trade group expressed support for an expansion in the homebuyer tax credit program and also for easing loan modifications and improving refinancing options for troubled borrowers through an overhaul of the federal HOPE for Homeowners program.

"HOPE for Homeowners was designed to help families refinance into safer, more affordable mortgages, in many cases helping those families avoid a devastating foreclosure," NAR President Charles McMillan said in a statement. “Despite being well-intentioned, the HOPE for Homeowners program has had limited success. Lenders have found the program difficult to participate in because of many of the program's constraints."

NAR is supporting H.R. 703 (see bill text), introduced by House Financial Services Committee Chairman Barney Frank, D-Mass., which would overhaul the HOPE for Homeowners program.

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