Housing Credit Legislation Passes the House Overwhelmingly

The House of Representatives has just taken a series of three votes on legislation which will comprise the housing legislation (H.R. 3221) with which it will go to conference with the Senate.  The first of the three votes was on legislation passed by the House Financial Services Committee which would broaden the FHA guarantee of mortgage loans that have been refinanced.  The legislation also includes certain reforms to GSEs which was previously passed by the House.  That amendment passed by a vote of 261-154 with at least 37 Republicans voting for the amendment.   This amendment's FHA provisions with respect to guaranteeing certain refinanced home mortgages has drawn a veto threat from the White House.  

The second of the three votes was on the Housing Assistance Tax Act which includes the LIHTC modernization legislation.   That amendment passed overwhelmingly by a vote of 322 - 94 with 83 Republicans voting for the amendment.  That legislation was passed by the Ways and Means Committee by a vote of 35-5, a bipartisan vote almost unheard of in the current partisan atmosphere on the Hill.   The House floor vote was a very good signal to the Senate that a significant number of Republicans want the LIHTC legislation.  We believe the vote would have been even stronger if the President had not strongly opposed two provisions that are unrelated to the LIHTC:  a proposed $7,500 credit for first-time homebuyers that would have to be paid back over 15 years and a provision that would provide for certain bond authority by the Federal Home Loan Bank Boards. 

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The House bill (H.R. 3221) will go to conference in some manner with housing legislation that has already been passed by the Senate that includes broadening of MRB authority but which does not include LIHTC modernization.  It is also possible that the Senate will pass further legislation, possibly addressing GSEs (among other things), with which it will also go to conference with the House on H.R. 3221.

The legislative process to complete a housing bill will take several weeks.   House Financial Services Committee Chairman Barney Frank (D-MA) has expressed hope to complete a final bill and send it to the President by the July 4^th Congressional recess.  The Senate and House currently are focused on other legislation, including tax legislation that would extend renewable energy tax credits set to expire a the end of this year and other credits, including the new markets tax credit, that expired last year.  That legislation could include some of the provisions that the Ways and Means Committee used to "pay for" the Housing Assistance Tax Act, including the LIHTC modernization provisions.  If the Senate and House actually take up and pass so-called extenders legislation that includes these tax revenue increases, it may prove more difficult to include all of the LIHTC provisions passed by the House in a conference with the Senate.  This could slow the process, but we will work to make sure that the process continues in order to meet the July 4^th recess date set by Chairman Frank.

The Coalition will stay on top of these developments as we continue to stay deeply involved in the lobbying process.  Our goal, of course, is to have a final housing bill that includes all of the House passed LIHTC provisions (with some modifications which we have suggested, such as a flat 9 percent Credit percentage).  To that end, Coalition president Ronne Thielen, legal counsel Rick Goldstein and I have conducted a series of meetings with Senators and their staff this week to educate them about the House legislation and its differences with the Cantwell-Smith legislation, as well as to urge them to sponsor the Cantwell-Smith legislation and to advise the Senate Leadership and Senate Finance Committee Chairman Max Baucus (D-MT) to concede to the House and include the LIHTC modernization provisions in a final housing bill.  These lobbying activities will continue unabated over the next several weeks.

In addition, we also plan to meet with White House officials directly involved in tax and housing policy to ensure that the White House does not enter into negotiations on a final housing bill with a disposition against the LIHTC measures.