Last week, National Public Radio reporter Mike Pesca sent me a link to the GOPs latest proposal for “The Responsible Homeowners Act” (PDF file). It contains several provisions, including the resurrection of the $15K home buyer tax credit that was briefly a part of the Stimulus Bill passed in February (and discussed on this blog at length).
Here’s what is in the plan with regard to a $15,000 Home Buyer Credit:
$15,000 Home buyer Credit: To spur home purchases across-the-board, House Republicans propose a $15,000 home-buyers credit for all purchases of primary residences provided that the buyer puts 5% down (covers purchases made before July 1, 2010). The down-payment requirement encourages responsible home ownership and will ensure that we do not repeat the mistake of the past where individuals ended up with more home than they could afford through the use of zero-down-payment loans.
Mike asked for my thoughts on this, and here’s what I told him:
This sounds *very* similar to the original $15K proposal that was nixed before the bill reached the President.
There was not (that I recall) a down payment requirement in that original version.
The down payment minimum of 5% concerns me for one reason — the current down payment requirement on FHA loans is 3.5%. So by requiring a minimum of 5%, many FHA buyers may be excluded. I understand (and agree completely) that some down payment should be required, but to exclude FHA buyers is not a good idea in my opinion. The best solution would be to simply write language along the lines of "a minimum down payment of 5% will be required (3.5% for those using FHA loans)". Or something to that affect. Obviously I’m neither a Congressman nor an attorney (nor do I have any desire to be either!).The original plan also allowed for the $15K credit to be split equally across two years. I think it’s important that stay in this new plan as many (MANY) people do not have $15K of tax liability in one year. I don’t see any mention of this in the link you provided (and thanks for that by the way!). I’d also like to see the credit be "refundable" like the current $8K credit and not require re-payment (like the current credit and the original $15K proposed credit was.) I understand this document is likely just a summary and doesn’t include all the details — or maybe they haven’t even worked out details yet.
I *really* like that it’s not limited to first time buyers only.
Also of interest in the proposal:
- A $5,000 refinancing credit.
- Incentives for voluntary refinancing to keep homeowners in their home.
- Mortgage modifications, not lawsuits.
- Incentives for neighborhood investors.
- Not rewarding those who created the problem.
There are not a lot of details in the plan summary but it is, if nothing else, thought provoking. The text of the full bill is available here. I haven’t had the time to read it, but it apparently goes into far more detail that the summary linked to above.
H.R. 1903 was introduced in the House on April 2 and was subsequently referred to the Committee on Ways and Means as well as the Committees on Financial Services and the Judiciary. There are 11 co-sponsors, all Republicans. Given the current make up of the House, I have a feeling this one will die in committee…
We’ll be keeping track of this and bring you whatever we can dig up!
I'm Jay Thompson, and I have a little blogging problem... Welcome to The Phoenix Real Estate Guy, or "TPREG" as I fondly refer to it.
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