Rural Housing Funding Restored
The long-anticipated restoration of the Section 502 single-family rural housing program is headed to President Obama's desk for signature into law. NAR has been working on restoring funding since March. Although the legislation increases the guarantee fee for borrowers, the fee can still be financed. This change will make the program completely self-sufficient. The legislation also increases the Rural Housing Service (RHS) commitment authority allowing guaranteed loans. Previously RHS had been providing conditional commitments. RHS will announce new guidelines shortly after the President signs the bill.
Read the Advocacy Letters NAR Sent to Congress
President Signs Wall Street Reform and Consumer Protection Act
On July 22, President Obmama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act. NAR has been working closely with members of Congress to ensure that Wall Street Reform legislation did not adversely affect REALTORS®. Click below to read about the provisions of particular interest to REALTORS®.
How H.R. 4173 Affects REALTORS®
NAR Urges Congress to Restore Rural Housing Funding
The Section 502 Rural Housing single family loan guarantee program remains unfunded. This program used all their commitment authority back in May, and despite being noncontroversial, Congress has been unable to pass legislation to restore the program. Thousands of families with rural housing loans have been left in limbo and continue to be threatened with the expiration of the tax credit on September 30. Last week, NAR sent a letter to Senate leaders urging them to bring this legislation to the floor. Language has been included in the Emergency Supplemental Appropriations Act (H.R. 4899), which has passed the House and Senate. However, that bill continues to be stalled and is currently awaiting final passage. We are hopeful Congress will act in the next two weeks on either the standalone bill (S. 3266) or the Supplemental Appropriations Act to restore funding for this program and help low-income rural families nationwide.
NAR Letter to Senator Harry Reid (D-NV), Senate Majority Leader NAR Letter to Senator Mitch McConnell (R-KY), Senate Minority Leader
House Passes Flood Insurance Reform
On July 15, the House of Representatives passed H.R. 5114, the Flood Insurance Reform Priorities Act of 2010. Among the key elements of the bill is the extension of the National Flood Insurance Program (NFIP) to September 30, 2015. The actions of the House are an important step toward enacting meaningful reform for the Flood Insurance Program and ending the uncertainty of stop-gap measures that have been keeping the program in place. NAR has been actively seeking NFIP reform since 2008. The bill now will move to the United States Senate where the prospects of passage are not clear.
Unless a longer term reauthorization is enacted, Congress will again have to consider another short-term extension before September 30 2010, when NFIP authority is next set to expire. Since September 2008, the House and Senate have not been able to agree on the NFIP debt reforms and thus has resorted to approving a series of short-term extensions. There have been eight such extensions so far and, twice, the NFIP authority has been allowed to expire. NAR will continue to provide regular updates on the status of this legislation and the short-term extensions in the interim.
Follow the Status of H.R. 5114
Fannie Mae Relaxes REO Listing Limit
Last month, HomePath (the Fannie Mae division charged with managing its inventory of Fannie Mae-owned homes, known as REOs) issued an REO Announcement that imposed a strict limit of 30 on the number of REO listings that a broker of record could have at any time. The announcement warned companies that handle Fannie’s REO inventory to apply the 30-property limit strictly and noted “100% compliance” was expected.
NAR immediately heard from members raising concerns about the impact of such a low, arbitrary limit on their businesses. NAR agrees that Fannie should not have an inflexible limit on the number of REO listings. Instead, Fannie should rely on documented success and professional performance of real estate brokers.
On July 9, in response to REALTOR® concerns, HomePath released another REO Announcement that relaxed the rules announced at the end of June. The July 9 announcement states that Fannie Mae, as a general rule, does not allocate more than 30 active REO listings from any one Fannie source at any one time. It stated this has been long-standing practice. The new announcement went on to acknowledge that some higher-performing brokers can handle more than 30 properties at one time and still exceed Fannie’s standards. Accordingly, Fannie Mae will approve special exceptions to the 30 listing limit in appropriate circumstances. In addition, the Announcement notes that the 30 listing limit is applied per source, so brokers may have 30 properties directly from Fannie and 30 from an outsourcer, without requiring Fannie approval. More information is expected soon.
NFIP and Homebuyer Tax Credit Closing Deadline Both Extended
On July 2, the president signed into law two important pieces of legislation for REALTORS®, the National Flood Insurance Program Extension Act of 2010 and Homebuyers Assistance and Improvement Act of 2010.
H.R. 5623, passed by the Senate on June 30, extended the closing deadline for the Homebuyer Tax Credit. The extension applies only to transactions that have ratified contracts in place as of April 30, 2010, that have not yet closed. The legislation is designed to create a seamless extension; the new closing deadline for eligible transactions is now September 30, 2010. There will be no gap between June 30 and the date the President signs the bill into law. NAR worked closely with Congressional leaders on both sides of the aisle to enact this important legislation. Extending the tax credit closing deadline will help provide additional stability to real estate markets across the nation.
Also on June 30, the Senate passed the National Flood Insurance Program Extension Act of 2010 (H.R. 5569), an extension of the National Flood Insurance Program until September 30, 2010. This will allow transactions to move forward. The bill is retroactive and covers the lapse period from June 1, 2010, to the date of enactment of the extension. NAR members sent more than 250,000 letters to Members of Congress encouraging them to extend the program.
Carried Interest Tax Increase Tabled for Now
The Senate cloture vote to end debate on H.R. 4213, the American Jobs and Closing Tax Loopholes Act of 2010 or better known as the Extender Package, failed by a vote of 57-41. This was the Senate's third unsuccessful attempt in June to limit debate and move to an up or down vote on a bill that includes the tax increase on Carried Interest as a revenue offset. While this particular vote was unsuccessful, the provision is likely to be included in whatever tax package can move through the Senate this year.
House Passes FHA Reform Act of 2010
H.R. 5072, FHA Reform Act of 2010, would strengthen the FHA loan insurance program while keeping it available and affordable to responsible home buyers. Allowing FHA to raise the monthly insurance premium would let FHA lower the up-front premium that places a burden on cash-strapped borrowers at closing. En route to passage, the House defeated an amendment that would have increased the FHA down payment from 3.5 percent to 5 percent, which would have disenfranchised more than 300,000 potential homeowners and would not have contributed significantly to FHA cash reserves.
States Compete for First REALTOR® Party President's Cup
The REALTOR® Party President's Cup combines state RPAC goals and state grassroots advocacy goals into one exciting REALTOR® Party state award for 2010. The cup will be presented at the 2010 Annual Meeting to each state that demonstrates a strong commitment to building the REALTOR® PARTY through Advocacy action and RPAC fundraising by achieving six goals in 2010.
Clearing Up Rumors About Cap and Trade and Health Care
REALTORS® across the country are receiving information about how the the American Clean Energy and Security Act (Cap and Trade) and Health Insurance Reform will affect the housing market and tax policy. To clear up any confusion, click below to read additional information on the reality of how this proposed legislation and health care reform really affect the housing market and tax issues.
Get Information About the American Clean Energy and Security Act (Cap and Trade) Read the FAQ on Tax Issues and Health Care Reform
Home Affordable Foreclosures Alternatives (HAFA) Program Takes Effect
April 5, 2010, was the deadline for participating servicers to implement the Home Affordable Foreclosure Alternatives Program, known as HAFA. The program reportedly covers servicers handling more than 90 percent of all mortgages. REALTORS® are already hearing that the staff of many servicers have not yet even heard about the program, so it is clear that many servicers will not "hit the ground running." Patience will be needed, but now that there is a program in place, REALTORS® can negotiate faster short sales by urging compliance with the new procedures and deadlines. NAR will carefully monitor implementation and will report delays and other program problems to the Treasury Department.
NAR's Short Sales Information Resource HAFA Brochure HAFA FAQ Treasury Department Guidelines and Forms
Homebuyer Tax Credit Extended and Expanded
On November 6, President Obama signed the Unemployment Insurance Bill, which contains the Homebuyer Tax Credit extension and expansion. The United States House of Representatives, by a vote of 430-12, joined the Senate in passing the bill. Many parts of the bill take effect immediately. As of the signing of the legislation, the income limits increase to $125,000 adjusted gross income on a single return and $225,000 on a joint return. In addition, the so-called "move-up" credit is also in effect as of November 6. Thus, individuals who have used a home as a principal residence for five consecutive years of the past eight years will be eligible for a $6,500 refundable tax credit for purchases completed between November 6, 2009, and April 30, 2010. See more details on the the changes to the Homebuyer Tax Credit below.
Changes to the Homebuyer Tax Credit Law Frequently Asked Questions About the New Bill Listen to NAR President Charles McMillan's Podcast About the Bill Passing See How the House Voted In Depth: 2009/2010 Extended Homebuyer Tax Credit Watch the Entries in the Tax Credit REALTOR Party Video Contest
The Impact of the Home Valuation Code of Conduct
This month, NAR conducted a survey of its members to gauge the impact the Home Valuation Code of Conduct (HVCC) is having on the real estate industry. A preliminary analysis released on July 6, 2009, indicated that the implementation of the HVCC appears to be having adverse impacts on the housing markets.
A more detailed analysis of the survey results confirms the early analysis. While 70 percent of appraisers report that turnaround times shortened after May 1, 2009, approximately 75 percent of REALTORS® who responded report an increase in the length of time it takes to get the appraisal report, which is causing delays or cancelling deals. This may correspond to an increase in the number of appraisal requests coming from appraisal management companies (AMCs). NAR's appraiser members report that 40 percent of appraisal requests come from AMCs after May 1, 2009, compared with only 13 percent prior to May 1. Both appraisers and REALTORS® say this is having a negative impact on the quality of appraisals while the cost of an appraisal for the consumer is increasing.
NAR recently applauded the Federal Housing Finance Agency for instructing Fannie Mae and Freddie Mac to take action to clarify confusion over HVCC. NEW: Updated Issue Brief on HVCC Read More About HVCC Listen to the President's Legislative Podcast on HVCC HVCC Research Commentary
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