Fix Housing First Update

Thanks to everyone for helping us overwhelm Congress last week with e-mails and calls. With your help we sent over 31,000 e-mails to Capitol Hill, bringing our total to-date to over 60,000.

Today, Senator Johnny Isakson (R-Ga.) introduced legislation to stimulate the housing market. The Fix Housing First Homebuyer Tax Credit legislation would expand the tax credit passed last Spring to include all purchasers and would eliminate the current requirement that it be repaid. It would also enhance the existing tax credit by:

-Extending the eligibility period for the credit to December 31, 2009
-Increase the credit amount to 10 percent of the home price capped at 3.5 percent of FHA loan limits (geographically dependent) – ranging between approximately $10,000 and $22,000
-“Monetizing” the credit so it is available at the time of closing
-Allowing the credit to be used in conjunction with mortgages financed by state or local bonds

If you’ve not already done so – and even if you have – please contact your Senators and urge them to support this bill.

The Troubled Asset Relief Program (TARP) bill is on the House floor, and debates on amendments are currently taking place and will continue next week. We expect the mark-up to occur before the Ways and Means Committee next week. The House bill includes language that allows Treasury to buy down mortgage rates. After a vote in the House it will proceed to the Senate for consideration there. The current timetable has debate concluding before the President’s Day recess in February.

Yesterday, you should have received a press release describing a new study that finds housing stimulus to be essential to economic recovery. Using a well regarded economic model, researchers from California-based consulting firm LECG LCC studied Fix Housing First’s short-term program that would combine a significant tax credit for all homebuyers of $10,000 to $22,000 with a time-restricted mortgage rate write down to 2.99 percent. The economic analysis demonstrated that adding these housing stimulus provisions to the anticipated economic recovery bill would over a four year period:

-Increase GDP by 1 percent annually
-Create 940,000 new jobs annually
-Increase average homeowner equity by $25,000 by 2012
-Increase aggregate homeowner equity by more than $2 trillion by 2012
-Generate revenues at the federal and state level that will exceed the cost of the program

Please help us spread the word by circulating the press release to your friends, colleagues, vendors, and business associates.