The mortgage industry has indicated support for legislation
proposed in the House and Senate that seeks to lessen tax burdens on working
families. The bill would increase the low-income housing tax credit (LIHTC) ceiling
by 12.5 percent for calendar years 2023 through 2025.
H.R. 7024, dubbed the “Tax Relief for American Families and
Workers Act of 2024,” was approved 40-3 in the House Ways and Means Committee,
demonstrating significant bipartisan support for the measure.
Mortgage Bankers Association (MBA) President and CEO Bob
Broeksmit noted the bill aligns with MBA’s top 2024 priority of increasing
support for affordable homeownership initiatives, which was announced
during MBA Annual 23.
“MBA and its members have long called for enacting tax
provisions that address our nation’s housing affordability crisis and the acute
shortage of homes for owning and renting,” Broeksmit said in a statement. “We
support this bill, particularly for its meaningful enhancements to the LIHTC
that will produce an estimated 200,000 additional rental units over the next
two years.”
In addition to increasing the low-income tax credit, the
bill also would reduce the bond-financing threshold to 30 percent for projects
financed by bonds with an issue date after Dec. 31, 2023.
“Specifically, the increased state allocations for
affordable housing projects and reduced tax-exempt bond financing requirement
will help more borrowers and lenders to use the LIHTC program to construct and
rehabilitate housing for low- and moderate-income households,” he added. “The
LIHTC program is a successful public-private partnership that has supported the
production of nearly three million rental units since its inception.”
The bill also includes extensions for the Child Tax Credit, Employee
Retention Tax Credit and Business Tax Credit, among other tax-relief measures
passed in previous legislation.
National Housing Conference President and CEO David
Dworkin and Community Home Lenders of America executive director
Scott Olson also expressed support for the measure.
“This is not just about poor people, although poor people
have certainly been hammered in terms of housing affordability,” Dworkin said.
“Those on the lowest rungs of the economic ladder have actually been forced
into working homelessness. So, it’s not just people who are unemployed or
mentally ill, but people who are actually going to work every day after they’ve
woken up in a tent or a car.”
Olson indicated the need for more legislative measures to
address high interest rates and pricing concerns.
“Rates went from 3 percent, and they’ve bottomed back down
to the 7 percent range, but that’s just been a killer,” Olson said. “Because if
you just look at the math, prices have been sort of sticky. They haven’t really
fallen in some areas, or they keep going up in some areas. They may be softer,
but you’re doubling the expenditures on a mortgage with similar prices. That’s
a formula for a huge step backward in terms of affordability.”
The bill was introduced by Rep. Jason Smith (R-Mo.), who
worked alongside Senate Finance Committee Chairman Ron Wyden (D-Ore.) on the
package, prompting MBA to thank the lawmakers for their “bipartisan, bicameral
work on this tax package.”