Government Affairs Talking Points: Move the Housing Market Forward and Safeguard Our Communities

Congressional Action Needed:

Enact legislation that will stabilize housing and mortgage markets.

Congressional Actions to Date:

1) House of Representatives

The House passed legislation to extend the 2008 FHA, Fannie Mae and Freddie Mac loan limits through 2009.  The House passed legislation to increase the homebuyer tax credit to $8000 and extend it through August of 2009. 

What to tell your Representatives:

• Fortify Fannie Mae and Freddie Mac to ensure capital for mortgage lending in all markets; make the 2008 loan limit formula and caps permanent to provide fair, affordable financing for all borrowers; and extend the $8000 homebuyer tax credit to all homebuyers to encourage purchases.

2) United States Senate

The Senate passed legislation to extend the 2008 FHA, Fannie Mae and Freddie Mac loan limits through 2009.

What to tell your Senators:

• Fortify Fannie Mae and Freddie Mac to ensure capital for mortgage lending in all markets; make the 2008 loan limit formula and caps permanent to provide fair, affordable financing for all borrowers; and extend the $8000 homebuyer tax credit to all homebuyers to encourage purchases.

Issue Background:

• The GSEs (Freddie Mac and Fannie Mae) are critical to insuring mortgage market liquidity.
  On September 7, 2008, the Federal Housing Finance Agency (FHFA) placed Fannie Mae and Freddie Mac (GSEs) into conservatorship to restore confidence in them and enhance their capacity to fulfill their housing mission.  Since their takeover, the GSEs have been crucial participants in the secondary mortgage market as most private sector participants withdrew when the economic crisis expanded. Without the GSEs and FHA-insured loans, there would be almost no capital available for mortgage lending, which would bring home sales to a halt for practical purposes.
  
  
• Higher loan limits need to be permanent and available in markets.
  Despite the 2008 limits being extended into 2009, the limits have only just been implemented.  And the temporary nature of the limits has made lenders wary of lending.   Making the limits permanent at levels appropriate in all parts of the country will provide homeowners and homebuyers with safe, affordable financing and help stabilize local housing markets.
  
  
• Expanding the homebuyer tax credit will generate marketplace activity.
  The current residential real estate marketplace is characterized as having many browsers, but few purchasers.   The tax credit has helped, but expanding it to all borrowers would greatly increase activity and would facilitate the stabilization of home prices.

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