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The American Dream of owning a home is becoming harder to achieve for many people. Congress is taking steps to help Americans reach their goals. People from all walks of life rely on adequate housing to raise their families, stay safe and warm, and maintain a happy, healthy life.
Rep. Allen believes that every American deserves to return each day to quality housing. Every child should live in a safe, decent home. Every senior should be able to live out their golden years in dignity and security. Housing should be affordable and nearby job opportunities, so that families don’t have to sacrifice one for the other. Maine, like many parts of the country, faces significant shortages of affordable housing. Rep. Allen supports federal investment in programs and tax incentives that promote the construction and maintenance of affordable housing. He also supports public housing programs that benefit seniors, disabled people, and low-income families.
Housing must be a part of any discussion about sprawl, economic development, homelessness, long-term care, mental health, and energy conservation. Shelter is a basic human necessity and a critical part of economic development. Maintaining a home is becoming more costly as home heating oil prices rise. Rep. Allen is working to ensure that all Mainers have a safe, affordable, quality place to live.
Legislation
Mortgage Reform and Subprime Lending
Problems in the housing and mortgage markets were spurred by a combination of low interest rates, inflated housing prices, risky subprime mortgages, predatory lending activities, and lack of oversight and enforcement by previous congresses and the President. Interest rates are rising, credit is becoming more difficult to obtain, housing prices are falling, and many borrowers with adjustable rate mortgages are in or are facing foreclosure.
The Center for Responsible Lending reports that 2.2 million borrowers across the country, including almost 7,000 in Maine, could face foreclosure by the end of 2009 on homes bought using subprime mortgages. These foreclosures could cause nearby homes to lose value, possibly affecting more than 42,000 homes in Maine.
Problems in the housing and mortgage industries have widespread impact. Investors interested in benefiting from the housing boom were eager to purchase mortgage-backed securities, which included subprime loans. These investments, which include public pension funds, are now intricately linked to borrowers who may be subject to foreclosure, rate freezes, or refinancing. Meanwhile, many lenders have stopped making or have severely limited access to subprime loans and other forms of credit, thereby limiting access to finance for both refinancing and new purchases. Fewer homes are being bought, sold, and built, which affects many local businesses including realtors and home builders. In addition, every neighborhood with a foreclosure sign faces the possibility of falling property values. Finally, on the most individual level, few financial strains are more difficult than the loss of a home due to foreclosure or the need to make severe sacrifices in order to afford monthly mortgage payments.
From household economies to the nation’s economy, it is clear that there is need for answers. Solving problems in the housing and mortgage markets demands careful balancing by Congress. Legislation to limit the damage must be carefully constructed to minimize unintended consequences on the economy or people’s behavior, such as encouraging further excessive risk taking by individuals or the industry.
On October 4, 2007, Rep. Allen supported and the House passed H.R. 3648, the Mortgage Forgiveness Debt Relief Act, which changes the way forgiven mortgage debt is treated under tax law. Under prior law, if individuals sold their house for less than they owe, and their lender agreed to forgive the remaining debt, the borrowers would have had to pay taxes on the difference. For example, if you owed $70,000 on your mortgage, sold your house for $60,000 and the bank forgave the $10,000 difference, you would have owed taxes on the $10,000. Facing an additional tax burden on so-called “phantom income” when individuals are already struggling to pay housing costs is unfair and unrealistic. H.R. 3648 exempts these forgiven debts from being considered as taxable income through 2010 and applies retroactively to debt forgiven beginning on January 1, 2007. The measure also extends the deductibility of private mortgage insurance premiums through 2010. President Bush signed H.R. 3648 into law on December 20, 2007.
Congress also enacted law H.R. 3221, the Foreclosure Prevention Act of 2008. The bill provides voluntary mortgage refinancing assistance to keep families from losing their homes, protects neighboring home values, and helps stabilize the housing market. It modernizes the Federal Housing Administration (FHA) and changes the way government-sponsored lending entities like Fannie Mae and Freddie Mac operate. It also gives first-time homebuyers interest-free loans of up to $7,500 to spur home buying and to stabilize the market. See below for more information on Rep. Allen’s bill to create a First Time Homebuyers’ Tax Credit.
First Time Home Buyers
One of the important provisions included in H.R. 3221, the Foreclosure Prevention Act, gives first time homebuyers an interest-free loan of up to $7,500. This provision was enacted after Rep. Allen introduced H.R. 5643, the First Time Homebuyers’ Tax Credit Act of 2008. H.R. 5643 would authorize a one-time tax credit of up to $3,000 for individuals and $6,000 for married couples.
A first time homebuyers’ tax credit will help people afford a down payment, pay closing costs, and qualify for a mortgage. Buying a home will encourage young families to put down roots, an especially important matter for Maine, which is losing young adults to other states. Encouraging home sales will also stimulate the economy and the housing industry in particular, including builders, contractors, and realtors.
Affordable Housing
Affordable housing is a key part of the safety net that government should help provide for vulnerable Americans. Rep. Allen will continue to work to ensure that all Americans are able to sleep under a roof at night.
National Affordable Housing Trust Fund
Rep. Allen is a cosponsor of H.R. 2895, which would establish a National Affordable Housing Trust Fund to construct and preserve affordable housing. This provision was also included in H.R. 3221, the Foreclosure Prevention Act. The Fund is a permanent program with a dedicated source of funding not subject to the annual appropriations process. This ensures that funding cannot be reallocated to other priorities and that the Fund will not be a drain on taxpayers dollars. Fannie Mae and Freddie Mac are required to donate 1.2 percent of their total outstanding mortgages to the fund. At least 90 percent of the funds must be used for the production, preservation, rehabilitation, or operation of affordable rental housing. At least 75 percent of the funds used for rental housing must benefit extremely low income households and all funds must benefit very low income households.
Section 8
Rep. Allen supports Section 8 rental housing assistance program which is the main form of federal housing assistance. The program consists of an existing housing and voucher program. Nationally, the Section 8 program helps over two million households to rent, and increasingly, to own modest housing in the private market. Most recently, Rep. Allen voted for H.R. 1851, the Section 8 Voucher Reform Act, which will fix the voucher funding formula and provide necessary programmatic reform. The Senate has not yet considered this bill.
Section 202
Rep. Allen supports low income and elderly housing programs for those who need assistance. Section 202, the Supportive Housing for the Elderly Program, is the only federal housing program which provides housing assistance solely to the elderly. H.R. 2930, the Section 202 Supportive Housing for the Elderly Act would expand the supply of affordable housing for seniors. This bill passed the House in December 2007 and must now be considered by the Senate. Rep. Allen supported this bill.
Homelessness
According to the Maine State Housing Authority, 829 people were homeless in Maine on January 30, 2007, including 208 children. Taking care of the homeless, especially children, who are vulnerable to victimization and more likely to engage in high-risk behavior than if provided adequate and safe shelter, is a priority for Rep. Allen.
The Runaway and Homeless Youth Act was first authorized in 1977 and encompasses three programs to assist runaways and homeless youth. The Basic Center Program provides temporary shelter, counseling, and after care services to runaway and homeless youth under age 18 and their families; the Transitional Living Program is targeted to older youth ages 16 to 21. The Street Outreach Program provides education, treatment, counseling, and referrals for runaway, homeless, and street youth who have been subjected to or are at risk of being subjected to sexual abuse and exploitation. Rep. Allen has supported adequate funding for this program and will continue to work to ensure that the youth of America are cared for.
Press Releases
Articles
Sign up to recieve email updates on Housing
The American Dream of owning a home is becoming harder to achieve for many people. Congress is taking steps to help Americans reach their goals. People from all walks of life rely on adequate housing to raise their families, stay safe and warm, and maintain a happy, healthy life.
Rep. Allen believes that every American deserves to return each day to quality housing. Every child should live in a safe, decent home. Every senior should be able to live out their golden years in dignity and security. Housing should be affordable and nearby job opportunities, so that families don’t have to sacrifice one for the other. Maine, like many parts of the country, faces significant shortages of affordable housing. Rep. Allen supports federal investment in programs and tax incentives that promote the construction and maintenance of affordable housing. He also supports public housing programs that benefit seniors, disabled people, and low-income families.
Housing must be a part of any discussion about sprawl, economic development, homelessness, long-term care, mental health, and energy conservation. Shelter is a basic human necessity and a critical part of economic development. Maintaining a home is becoming more costly as home heating oil prices rise. Rep. Allen is working to ensure that all Mainers have a safe, affordable, quality place to live.
Legislation
Mortgage Reform and Subprime Lending
Problems in the housing and mortgage markets were spurred by a combination of low interest rates, inflated housing prices, risky subprime mortgages, predatory lending activities, and lack of oversight and enforcement by previous congresses and the President. Interest rates are rising, credit is becoming more difficult to obtain, housing prices are falling, and many borrowers with adjustable rate mortgages are in or are facing foreclosure.
The Center for Responsible Lending reports that 2.2 million borrowers across the country, including almost 7,000 in Maine, could face foreclosure by the end of 2009 on homes bought using subprime mortgages. These foreclosures could cause nearby homes to lose value, possibly affecting more than 42,000 homes in Maine.
Problems in the housing and mortgage industries have widespread impact. Investors interested in benefiting from the housing boom were eager to purchase mortgage-backed securities, which included subprime loans. These investments, which include public pension funds, are now intricately linked to borrowers who may be subject to foreclosure, rate freezes, or refinancing. Meanwhile, many lenders have stopped making or have severely limited access to subprime loans and other forms of credit, thereby limiting access to finance for both refinancing and new purchases. Fewer homes are being bought, sold, and built, which affects many local businesses including realtors and home builders. In addition, every neighborhood with a foreclosure sign faces the possibility of falling property values. Finally, on the most individual level, few financial strains are more difficult than the loss of a home due to foreclosure or the need to make severe sacrifices in order to afford monthly mortgage payments.
From household economies to the nation’s economy, it is clear that there is need for answers. Solving problems in the housing and mortgage markets demands careful balancing by Congress. Legislation to limit the damage must be carefully constructed to minimize unintended consequences on the economy or people’s behavior, such as encouraging further excessive risk taking by individuals or the industry.
On October 4, 2007, Rep. Allen supported and the House passed H.R. 3648, the Mortgage Forgiveness Debt Relief Act, which changes the way forgiven mortgage debt is treated under tax law. Under prior law, if individuals sold their house for less than they owe, and their lender agreed to forgive the remaining debt, the borrowers would have had to pay taxes on the difference. For example, if you owed $70,000 on your mortgage, sold your house for $60,000 and the bank forgave the $10,000 difference, you would have owed taxes on the $10,000. Facing an additional tax burden on so-called “phantom income” when individuals are already struggling to pay housing costs is unfair and unrealistic. H.R. 3648 exempts these forgiven debts from being considered as taxable income through 2010 and applies retroactively to debt forgiven beginning on January 1, 2007. The measure also extends the deductibility of private mortgage insurance premiums through 2010. President Bush signed H.R. 3648 into law on December 20, 2007.
Congress also enacted law H.R. 3221, the Foreclosure Prevention Act of 2008. The bill provides voluntary mortgage refinancing assistance to keep families from losing their homes, protects neighboring home values, and helps stabilize the housing market. It modernizes the Federal Housing Administration (FHA) and changes the way government-sponsored lending entities like Fannie Mae and Freddie Mac operate. It also gives first-time homebuyers interest-free loans of up to $7,500 to spur home buying and to stabilize the market. See below for more information on Rep. Allen’s bill to create a First Time Homebuyers’ Tax Credit.
|
First Time Home Buyers
One of the important provisions included in H.R. 3221, the Foreclosure Prevention Act, gives first time homebuyers an interest-free loan of up to $7,500. This provision was enacted after Rep. Allen introduced H.R. 5643, the First Time Homebuyers’ Tax Credit Act of 2008. H.R. 5643 would authorize a one-time tax credit of up to $3,000 for individuals and $6,000 for married couples.
 |
| Congressman
Tom Allen talked to the press recently about his legislation, “The
First Time Homebuyers’ Tax Credit Act of 2008,” (H.R. 5643). Dick Morin
of the Maine Association of Mortgage Brokers, also spoke of the need
for the bill. |
Affordable Housing
Affordable housing is a key part of the safety net that government should help provide for vulnerable Americans. Rep. Allen will continue to work to ensure that all Americans are able to sleep under a roof at night.
National Affordable Housing Trust Fund
Rep. Allen is a cosponsor of H.R. 2895, which would establish a National Affordable Housing Trust Fund to construct and preserve affordable housing. This provision was also included in H.R. 3221, the Foreclosure Prevention Act. The Fund is a permanent program with a dedicated source of funding not subject to the annual appropriations process. This ensures that funding cannot be reallocated to other priorities and that the Fund will not be a drain on taxpayers dollars. Fannie Mae and Freddie Mac are required to donate 1.2 percent of their total outstanding mortgages to the fund. At least 90 percent of the funds must be used for the production, preservation, rehabilitation, or operation of affordable rental housing. At least 75 percent of the funds used for rental housing must benefit extremely low income households and all funds must benefit very low income households.
Section 8
Rep. Allen supports Section 8 rental housing assistance program which is the main form of federal housing assistance. The program consists of an existing housing and voucher program. Nationally, the Section 8 program helps over two million households to rent, and increasingly, to own modest housing in the private market. Most recently, Rep. Allen voted for H.R. 1851, the Section 8 Voucher Reform Act, which will fix the voucher funding formula and provide necessary programmatic reform. The Senate has not yet considered this bill.
Section 202
Rep. Allen supports low income and elderly housing programs for those who need assistance. Section 202, the Supportive Housing for the Elderly Program, is the only federal housing program which provides housing assistance solely to the elderly. H.R. 2930, the Section 202 Supportive Housing for the Elderly Act would expand the supply of affordable housing for seniors. This bill passed the House in December 2007 and must now be considered by the Senate. Rep. Allen supported this bill.
Homelessness
According to the Maine State Housing Authority, 829 people were homeless in Maine on January 30, 2007, including 208 children. Taking care of the homeless, especially children, who are vulnerable to victimization and more likely to engage in high-risk behavior than if provided adequate and safe shelter, is a priority for Rep. Allen.
The Runaway and Homeless Youth Act was first authorized in 1977 and encompasses three programs to assist runaways and homeless youth. The Basic Center Program provides temporary shelter, counseling, and after care services to runaway and homeless youth under age 18 and their families; the Transitional Living Program is targeted to older youth ages 16 to 21. The Street Outreach Program provides education, treatment, counseling, and referrals for runaway, homeless, and street youth who have been subjected to or are at risk of being subjected to sexual abuse and exploitation. Rep. Allen has supported adequate funding for this program and will continue to work to ensure that the youth of America are cared for.
Press Releases
Articles
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