Commercial Finance Report

Congress Urges Solutions to Commercial Real Estate Crisis

Conventional Residential Lending Report

New Incentive for Buyers of Fannie Mae-Owned Properties

Environment Report

2011 Budget Request Highlights for Key Agencies

Federal Tax Report

Budget Includes Capital Gains Modifications
Administration Again Proposes MID Limits for Upper-income Individuals

Housing Report

Administration’s Budget Proposes $38.5 Billion for Housing Programs
Administration’s Budget Proposes $24 billion for Rural Development Programs
Administration Requests $59 billion in Home Loan Guarantees


Commercial Finance Report

 
Congress Urges Solutions to Commercial Real Estate Crisis
Last week 79 Member of Congress wrote to Treasury Secretary Tim Geithner and Federal Reserve Chairman Ben Bernanke, urging them to take a more active role in commercial real estate markets. While residential markets recover, commercial real estate markets continue to suffer from a scarcity of credit, ballooning delinquency rates and nearly $1.4 in commercial real estate debt coming due in the next three years. The letter, lead by Reps. Kanjorski (D-PA) and Calvert (R-CA) was bipartisan, and asked the agencies to establish clear methods for loan modifications, develop metrics to differentiate performing and non-performing properties, and take other steps to provide investor confidence in commercial real estate markets. NAR and Commercial REALTOR leaders worked with Congress on the letter and encouraging cosigners.

Read the Letter/See if Your Member of Congress Signed It >

Contacts: Megan Booth, 202-383-1222

Contacts: Daniel Blair, 202-383-1089

Conventional Residential Lending Report

 
New Incentive for Buyers of Fannie Mae-Owned Properties
On January 28, 2010, Fannie Mae announced incentives for buyers to help clear its inventory of homes listed for sale on HomePath.com. To be eligible, a buyer must be the owner-occupant (not an investor), have the offer accepted on or after January 28, 2010, and close before May 1, 2010. Buyers may receive an incentive of up to 3.5% of the sales price for closing costs or the purchase of a new Whirlpool® appliance by Fannie Mae, or a combination at the option of the buyer.

Fannie Mae Press Release >
HomePath.Com Special Offers, Including New Incentive >

Contacts: Jeff Lischer, 202-383-1117

Contacts: Tony Hutchinson, 202-383-1120

Environment Report

 
2011 Budget Request Highlights for Key Agencies
The Obama Administration released its FY 2011 Budget Request on Monday, February 1, 2010. These are budget request highlights for the agencies that address natural resources and the environment:

Federal Emergency Management Agency: The Budget requests $194 million for continuation of the Flood Map Modernization Initiative to update and modernize the nation’s flood maps, plus an additional $10 million for other flood plain management and mapping activities.

Environmental Protection Agency: The Budget requests $43 million in new funding for regulatory initiatives to control greenhouse gas emissions under existing Clean Air Act authorities. Requested funds include $25 million to aid States in permitting activities for greenhouse gas (GHG) emissions under the New Source Review, and Title V operating permits programs.

Department of Energy: The Budget requests increases for energy efficiency related programs within the Department. The Weatherization and Intergovernmental Activities program would receive a 43 percent funding boost over 2010 levels, increasing from $270 million to $385 million under the budget request. The program includes the Weatherization Assistance Program, which supports energy efficiency retrofits for low-income families, and other building efficiency improvement programs such as the State Energy Program. The Building Technologies Program, which supports work on building efficiency technology and develops the department’s Appliances and Commercial Equipment Standards, would see a 4 percent increase over 2010 funding levels, going from $222 million to $231 million under the budget proposal.

Bureau of Land Management: The Budget requests a $13.1 million increase for high-priority land acquisition projects. The request also includes a program increase of $1.3 million for management of new wilderness areas designated by the Omnibus Public Land Management Act of 2009.

Contacts: Russell Riggs, 202-383-1259

Contacts: Austin Perez, 202-383-1046

Contacts: Helen Devlin, 202-383-7559

Federal Tax Report

 
Budget Includes Capital Gains Modifications
The newly-released Fiscal Year 2011 Budget proposal addresses the 2011 expiration of the 15% tax rate for long-term capital gains. Legislation in 2003 reduced the rate from 20% to 15%, effective through December 31, 2010. The proposed change would leave the 15% rate in place for those who file single tax returns with adjusted gross income (AGI) of no more than $200,000. The 15% rate would be retained for married couples filing joint returns with no more than $250,000 AGI. The proposal would become effective January 1, 2011.

Response and commentary about the proposal have, so far, been overshadowed by debate about carried interests and pending jobs proposals. It is not known when or if this proposal will be considered any time soon.

Contacts: Linda Goold, 202-383-1083

Contacts: Samuel Whitfield, 202-383-1131

 
Administration Again Proposes MID Limits for Upper-income Individuals
The Administration has proposed the same concept to limit itemized deductions in its Fiscal Year 2011 budget recommendations as it did in its FY 2010. The proposal again would limit the value of deductions for upper income taxpayers. Under the proposal, the value of itemized deductions (including the mortgage interest deduction and property tax deduction) would be capped at 28% (or 28 cents on the dollar) for taxpayers who were in higher brackets. (Under current law, taxpayers in the 30% and 35% tax brackets receive the economic value of 30 cents and 35 cents, respectively, on the dollar.) During 2009, this proposal was rejected almost immediately upon introduction.

In 2009, the Administration would have used these revenues from these limits to fund health care reform. In the current FY 2011 recommendations, the funds would be used to extend the duration of the 2001 Bush tax cuts for some, but not all, taxpayers. The Bush tax cuts would be continued for those who have adjusted gross income (AGI) of no more than $200,000 (single return) or $250,000 (married filing joint return). The tax rates would be allowed to revert to a maximum of 39.6% for taxpayers with AGI in excess of these amounts.

NAR has communicated its opposition to this proposal to the Chairs and all members of the tax-writing committees (Letters attached).

View NAR’s Letter to the Senate Finance Committee >
View NAR’s Letter to the House Ways and Means Committee >
More on Defending the Mortgage Interest Deduction >

Contacts: Linda Goold, 202-383-1083

Contacts: Samuel Whitfield, 202-383-1131

Housing Report

 
Administration’s Budget Proposes $38.5 Billion for Housing Programs
President Obama is requesting $48.5 billion for the US Department of Housing and Urban Development (HUD). The HOME Program includes a request for legislation that will provide $1 billion for the Housing Trust Fund. HUD expects Hope Bonds to generate $2.37 billion for administrative costs of the Hope for Homeowners Program (H4H) in anticipation of $14 billion in loan volume in 2010 and 2011.

The Federal Housing Administration (FHA) Mutual Mortgage Insurance Program account requests $400 billion in loan guarantees. The budget proposes a statutory revision to allow FHA more flexibility in setting annual premiums and incorporates underwriting changes to improve risk management. The improvements focus on three primary criteria:

  1. effect on broader housing market stabilization and recovery;
  2. effect on specific targeted populations;
  3. effect on the FHA’s capital reserves.

The budget requests a $250 million credit subsidy for the Home Equity Conversion Mortgage (HECM) Program. The administrative budget is $207 million, an $18 million increase to allow for the implementation of risk management enhancements.

HUD Press Release on Budget >
HUD Budget >

Contacts: Jerome Nagy, 202-383-1233

Contacts: Megan Booth, 202-383-1222

 
Administration’s Budget Proposes $24 billion for Rural Development Programs
The budget request provides for a $1.2 billion program level for Single Family Direct Loans, about $79 million above 2010 and maintains the 2010 appropriated level of $12 billion for Single Family Guaranteed Loans. These levels are expected to provide about 98,993 homeownership opportunities, a decrease from 2010 which reflects anticipated higher housing prices due to the improved economic conditions. Rural Development’s other housing programs such as Very-low Income Repair loans and grants, Rural Housing Preservation, Farm Labor Housing loans and grants, and Self-Help Housing, maintain approximately the same funding levels as in 2010.

USDA Statement on Budget >
USDA Budget >

Contacts: Megan Booth, 202-383-1222

Contacts: Kenneth Trepeta, 202-383-1294

 
Administration Requests $59 billion in Home Loan Guarantees
President Obama is requesting $125 billion for the US Department of Veterans Affairs (VA). The budget requests $59.2 billion for the US Department of Veterans Affairs Loan Guaranty. This is a decrease from the $68 billion in guarantees provided in FY 2009.

VA Budget Press Release >
VA Budget >

Contacts: Megan Booth, 202-383-1222

Contacts: Jerome Nagy, 202-383-1233

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