Housing Credit Modernization Legislation Update

This afternoon, July 10, 2008, Senator Maria Cantwell (D-WA) released the attached floor statement regarding H.R. 3221, the American Housing Rescue & Foreclosure Prevention Act of 2008, currently being debated by the Senate.  Senator Cantwell is an original sponsor of the original Housing Credit Modernization legislation, S. 2666, and has been vocal in her support of the Low Income Housing Tax Credit (Housing Credit) program. 

Speaking in support of the legislation, Senator Cantwell noted “the housing crisis in has reached critical proportions” adding “it is critically important that Congress’ response to the housing crisis not leave out those in need of affordable rental housing.” 

It is our understanding that the Senate has virtually resolved all the procedural hurdles previously facing H.R. 3221 and is expected to pass the legislation either later today or tomorrow, July 11, 2008.  It is expected the bill will pass with a comfortable majority.  When the bill is received back in the House, it is expected the House will make minor changes to the legislation.  

For example, the mortgage debt limit subject to Federal guarantee will be revised through a formula so that mortgages over $625,000, the level in the Senate bill, and close to the House level of $730,000 will be covered.  A second change could be made to the CDBG funding for purchases of certain troubled homes by localities.   The Senate bill does not pay for this provision, and the House Blue Dogs insist on paying for it under the paygo rules.  The Congressional Black Caucus, however, believes that the funding qualifies as "emergency" funding and should be exempt from paygo rules.  It should be noted, the White House opposes the CDBG provisions but we do not believe it will veto the legislation over it.  We believe the House currently is leaning toward dropping the provision.  

The Ways and Means Committee also may add a revenue raiser to the tax package to fill the $2.4 revenue gap resulting from the Senate's dropping of a provision that postpones for one year the worldwide interest allocation provision enacted as part of the JOBS Act three years ago.  The Ways and Means Committee may simply add the provision back to the bill.  Some additional tweaks to the Housing Credit provisions may also be offered.  

Once the House makes its final changes, the bill will return to the Senate for what we hope will be a final vote.  Once identical bills have been passed by both the House and Senate, the legislation will move to the White House for the President’s signature. 

If you require additional information or have questions concerning this legislation please contact Coalition legislative counsel Jim Miller (202-282-5724 or jfmiller@winston.com) or Coalition executive director Victoria Spielman (202-282-5349 or victoria.spielman@taxcreditcoalition.org).