Tax Credit: $8,000 First-Time Home Buyer Tax Credit Update

Administration Calls on Congress To Pass Tax Credit And Other Pro-Housing Measures

At a press conference this morning, Treasury Secretary Tim Geithner and HUD Secretary Shaun Donovan announced White House support for three key measures designed to prop up the U.S. Housing Market. Here’s the press release:

WASHINGTON, DC – Treasury Secretary Tim Geithner and HUD Secretary Shaun Donovan called on Congress to approve three important measures to improve housing and the housing market for Americans: extension of the First Time Homebuyers Tax Credit for a limited period, extension of higher loan limits for home mortgages, and secure funding for the Housing Trust Fund.

“We welcome efforts taken by Congress to extend the First Time Homebuyers Tax Credit for a limited period. This credit has brought new families into the housing market and contributed to three consecutive months of rising home prices nationwide,” said Secretaries Geithner and Donovan. “In extending the credit, we urge Congress to include strict measures to combat tax fraud and protect responsible homeowners. We also urge Congress to act swiftly to extend the loan limits that currently apply to most mortgages, helping make rates more affordable for middle-class families. Finally, we will work with Congress to identify a financing source for the Housing Trust Fund, which will help provide decent housing for families hardest hit by the current economic downturn.”

“These three measures will help support our efforts to stabilize the housing market by providing support for the recovery in housing prices, keeping mortgage rates low, and helping people who can afford their homes to avoid foreclosure,” said Secretary Geithner.

HUD Secretary Shaun Donovan said, “These three measures provide comprehensive support to our recovering housing market and continued access to affordable housing. While extending the tax credit and higher loan limits will help promote homeownership, funding the Housing Trust Fund will provide assistance to renter households impacted by the economic crisis.”

Fact Sheet: $8,000 Tax Credit and Other Pro-Housing Measures Supported by the White House

Secretary Geithner and Secretary Donovan today announced their support for three key housing measures:

Extend the First Time Homebuyer Credit, with strong anti-fraud measures. The Administration supports a limited extension of the First Time Homebuyers Tax Credit, which is currently set to expire on December 1. This credit has made the difference in bringing new families into the housing market. Those buyers, in turn, have reduced the inventory of unsold homes and contributed to three months in a row of increases in home prices nationwide. A stronger housing market benefits homeowners and strengthens the financial system. In order to reinforce the progress already made this year, the Administration urges Congress to extend the Credit for a limited period. In doing so, we urge the Congress to include effective measures to combat tax fraud, including setting a minimum age for home purchase and requiring documentary proof of the purchase in order to receive the credit.

Extend Loan Limits for Mortgage Loans. The Administration supports a one-year extension of the current loan limits for the Federal Housing Administration, Fannie Mae, and Freddie Mac. This extension is vital in helping support the continued availability of affordable mortgages for many working families and aiding the recovery in the housing markets. Under present law, the current loan limits will expire on December 31. Families are already applying for mortgages that are being turned down or priced higher due to this impending deadline. The extension of the loan limits is being considered in the upcoming Continuing Resolution, and we urge Congress to enact the extensions immediately in order to assure the smooth supply of capital to the housing market.

Secure Financing for the Housing Trust Fund. The Administration is committed to working with the Congress to fund the Housing Trust Fund. This Fund is an important source of support for extremely low income families who otherwise cannot afford decent housing. The Fund was created in the 2008 HERA legislation, but has not had an effective funding source and so has not been able to fulfill its important mission. While the President’s Budget proposed to fund the Housing Trust Fund for $1 billion, and fully offset it within the Budget, today the Administration is announcing that it will actively work with Congress to identify a specific offset to assure that level of financing for the Fund.