Thousands of realtors in Washington this week are letting lawmakers know how important it is that the FHA remain available to people who rely on the agency to become homeowners.
Preserving a strong secondary mortgage market, maintaining real estate tax incentives, and helping hard-hit consumers with mortgage cancellation tax relief are other legislative priorities realtors are taking to their lawmakers on Capitol Hill.
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The NAR is supporting legislation to replace Fannie Mae and Freddie Mac with the Federal Mortgage Insurance Corp., a nonprofit entity to provide explicit federal backing of safe and affordable residential mortgage loans. The agency would back loans up to $625,000 in high-cost areas and permit first-time borrowers to make down payments of 3.5 percent and, for repeat buyers, 5 percent.
On taxes, realtors are firm on preserving the mortgage interest deduction and the deductibility of state and local taxes. A discussion draft released earlier this year by House Ways & Means Committee Chairman Dave Camp (R-Mich.) would limit the MID to $500,000 and eliminate the deductibility of state and local taxes. The draft would also double the size of the standard deduction.
Taken together, said NAR Chief Lobbyist Jerry Giovaniello, these changes will effectively eliminate the tax differential between renting and owning by decreasing the percentage of households that itemize their deductions to just 4-5 percent of all filers, down from about a third of filers today.
The discussion draft hits commercial real estate investors, too, by repealing like-kind exchanges and lengthening the depreciation write-off period.
To help consumers still struggling to right themselves after the downturn, NAR is backing a two-year, retroactive extension of mortgage debt cancellation relief, which expires at the end of this year. The law prohibits the IRS from treating forgiven mortgage debt as income, thus protecting already struggling households from a tax bill on money they never see. “This is about fairness,” Giovaniello said.
The Capitol Hill visits are part of the Realtor Party Convention & Trade Expo activities.