chfa eNews

The Latest Information on the Economic Stimulus Bill and Housing Provisions

Dear CHFA Home Finance partners,

It is not our usual standard of practice to send so many eNews messages during one week. However, we know that many of you have been following the recent economic stimulus bill and are interested in the specifics. Here is the latest we've received from our national trade organization, NCSHA:

Housing Credit Provisions

The Conference Report includes:

$2.25 billion in HOME funds to be distributed according to the HOME program formula directly to State Housing Credit Allocating Agencies for filling equity gaps in developments awarded Credits in federal fiscal years 2007, 2008, and 2009. The Senate bill provided $2 billion in Housing Credit gap funding through HOME and $250 million in regular HOME formula grants; the House bill provided $1.5 billion in HOME formula grants and no Credit gap funding. A detailed NCSHA summary of this provision is attached.
A Housing Credit exchange provision allowing state Housing Credit allocating agencies to trade in up to 40 percent of their 2009 (per capita and pool) Credit authority and up to 100 percent of any unused or returned 2008 Credits for 85 cents on the dollar to fill funding gaps in otherwise “ready to go” developments.

The Conference Report does not include the Senate provision allowing Housing Credit investors to accelerate the Credit's benefits by taking 20 percent of the Credit in each of the first three years of the ten-year Credit period and the remaining 40 percent pro rata over the remaining seven years of the Credit period.

Home Buyer Tax Credit

The Conference Report increases the current first-time home buyer credit from $7,500 to $8,000, extends its expiration date from July 1, 2009 to December 1, 2009, eliminates its repayment requirement, and lifts the prohibition against combining it with MRBs. These provisions are effective for home purchases after December 31, 2008.

The House bill contained a provision eliminating the first-time home buyer tax credit repayment requirement for home purchases after December 31, 2008 and before July 1, 2009, the program's current expiration date. The Senate bill replaced the current first-time home buyer credit with a nonrefundable $15,000 home buyer credit available to all borrowers who purchase a home within a year of the bill's enactment date. The House bill did not repeal the MRB prohibition; the Senate bill did.

Housing Spending

The Conference Report provides:

$4 billion for the public housing capital fund, $1 billion less than the House and Senate bills each provided;
$2 billion for full-year payments to owners receiving Section 8 project-based rental assistance, $100 million less than the Senate bill and $2.1 billion more than the House bill;
$2 billion for the Neighborhood Stabilization Program, $2.2 billion less than the House bill and $2 billion more than the Senate bill;
$1.5 billion for homeless prevention activities, the same amount as in the House and Senate bills;
$1 billion for CDBG, the same as the House bill and $1 billion more than the Senate bill;
$510 million for Indian housing, $10 million more than the House bill and the same as the Senate bill;
$250 million for assisted housing energy retrofits, $2.25 million less than the House bill and $130 million more than the Senate bill;
$200 million for rural housing to support an additional $1 billion in Section 502 direct loans and $10.5 billion in Section 502 guaranteed loans, $300 million less than the House bill and the same as the Senate bill;
$100 million for lead paint hazard control, the same amount as in the House and Senate bills; and
$5 billion for weatherization, $1.2 billion less than the House bill and $2.1 billion more than the Senate bill.

Tax-Exempt Bond Provisions

The Conference Report contains provisions included in both the House and Senate bills eliminating the pro rata interest expense deduction disallowance for financial institution investments in tax-exempt bonds; increasing the small issuer qualified bond limit for financial institution bond investments from $10 million to $30 million; and repealing the AMT on all private activity bonds issued in 2009 and 2010.

The bill is expected to be signed by the President on Monday.

As we learn more about specific provisions, including amounts available to Colorado, we will share those with you.

Please contact the Home Finance division with any questions:

303.297.7376 or 1.888.320.3688 Denver
970.241.2341 or 1.800.877.8450 Western Slope

Thank you,
CHFA Home Finance Team