| October 12, 2009 |
By Joe Robson
NAHB Chairman and
Jerry Howard
NAHB President and CEO |
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NAHB to Congress: Help housing put America back to work!
That key message was conveyed directly by NAHB Chairman Joe Robson when he testified before the House Small Business Committee on Oct. 7.
 Joe told committee members that, while existing and new home sales appear to have stabilized in recent months, the industry continues to face some severe headwinds that are muting the chances of a significant housing recovery. Specifically, he said, "we are continuing to feel the impact of foreclosures and short sale properties as comps," which is resulting in inappropriately low appraisals that are effectively sinking one quarter of all new-home sales right now. Meanwhile, another major hurdle is the pending Nov. 30 expiration date for the first-time home buyer tax credit. If Congress wants to create jobs and put the housing market and economy on sounder footing, Joe said, it needs to extend the credit for an additional year and make it available to all purchasers of a principal residence. That stimulus alone would create nearly 350,000 new jobs over the coming year. Joe also said that Congress can help resolve problems tied to low appraisals by urging the FHA and Fannie Mae and Freddie Mac to adopt and enforce guidance that instructs appraisers on the proper procedures for the use of distressed and/or foreclosed properties as comparables. Beyond this, lawmakers can further help put the housing industry back on its feet by exerting their influence on regulators and the banking industry to restore lending for viable home building projects and to take meaningful steps to avoid unnecessary foreclosures on outstanding loans, said Joe. In addition, Joe called on Congress to make permanent and enhance the new energy-efficient home tax credit that is due to expire at the end of this year. Read our press release for more, or send your questions to: MondayMorningQuestions@nahb.com.
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A recent White House statement on the home buyer tax credit
 was music to the ears of home builders and buyers who believe this valuable incentive should be extended beyond its Nov. 30 expiration date. On Oct. 5, White House Press Secretary Robert Gibbs acknowledged that "there has been quite a bit of success" with the $8,000 tax credit, and added that President Obama is considering extending it to help strengthen the economy and create jobs. NAHB commended the White House for this statement, and reinforced our desire to work with the Administration to extend the tax credit's effective date for another year. In an NAHB press release issued on Oct. 6, we noted our estimate that approximately 200,000 additional home sales are attributable to the tax credit so far, and that it has resulted in a net increase of 187,000 jobs. Extending the tax credit through Nov. 30 of next year and making it available to all purchasers of a principal residence would result in an additional 383,000 home sales and generate 347,000 new jobs in the coming year. Read NAHB's press release here. Send questions to MondayMorningQuestions@nahb.com.
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The FHA Commissioner updated NAHB's Executive Board
 on a number of important issues last week in Chicago. As reported in an earlier edition of this publication, Commissioner David Stevens graciously accepted NAHB's offer to appear at our Oct. 30 Executive Board meeting, and we were very thankful that he took the time to speak to our members and provide some solid answers to our questions. In his remarks, Stevens reviewed FHA's performance, capital position, role in recovery efforts and recent policy announcements. Of particular interest to NAHB members, he also announced a delay in the Oct. 1 effective date for the new approval process for condominium projects that was included in Mortgagee Letter 2009-19. He said that FHA is currently reviewing the new condo standards, particularly the rule limiting the concentration of FHA-insured mortgages to no more than 30% of a project. Stevens stressed that, while there has been no final decision on the rule, the limit is likely to be increased – however, not to the 100% level that NAHB has advocated.
A notice on FHA's website states that the effective date for the new condo policy is now Nov. 2nd. Importantly, the site condo and manufactured housing condo project changes that have already taken effect are not affected by this delay. NAHB has requested a stakeholders meeting with Commissioner Stevens to discuss the 30% concentration limit and other changes to the condo policy prior to the Nov. 2 effective date. Stay tuned to this report for further developments. Read more in the next NBN Online, and direct any questions to MondayMorningQuestions@nahb.com.
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Most single-family builders are confronting a severe credit crunch,
 according to results of a newly conducted survey of NAHB members. In our latest poll of lending conditions for acquisition, development and construction (AD&C) financing, 63% of builders said that the availability of credit for single-family construction loans worsened in the second quarter of 2009. Of those reporting deteriorating credit conditions, 80% said that lenders are lowering the allowable loan-to-value ratio, while 76% said that lenders are not making any new loans. Meanwhile, 75% stated that lenders are reducing the amount they are willing to lend, and 62% said that lenders are requiring personal guarantees or collateral not related to the project. As a result, fully two-thirds of all respondents reported putting single-family construction projects on hold until the financing climate improves. And, despite continued assurances by bank regulators that they are not instructing institutions to stop making loans or to indiscriminately liquidate outstanding loans, survey respondents said that the top reason lenders have cited for restricting the availability of new loans or for tightening the terms of outstanding loans is that "regulators are forcing lenders to do it."
In coverage of the survey results, Nation's Building News Online noted our stance that regulators and lenders should provide leeway to residential construction borrowers who have loans in good standing by providing flexibility on re-appraisals and loan modifications and perhaps forbearance on loans to give builders time to complete and sell their inventory. NAHB Chairman Joe Robson also pointed out that, "There can be no meaningful economic recovery until the flow of credit is restored to housing." Contact: MondayMorningQuestions@nahb.com.
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Two more NAHB media teleconferences
 gave builders in a pair of states the opportunity to get the word out about our priorities within the Revive Housing, Restore America campaign – particularly, the need for immediate congressional action to extend and expand the first-time home buyer tax credit. On Oct. 7, Florida builders Alberto Milo from Miami, Eric Isenbergh in Tampa and Nathan Cross in Orlando joined with NAHB Chief Economist Dave Crowe to explain to reporters in that state how specific moves to bolster housing can spur significant job growth across a region that desperately needs it. Builders in Washington state got their turn to be heard the following day, when John Piazza Sr. in Burlington, Wash. joined with NAHB Senior Economist Bernard Markstein for a similar event. This brings the number of regional teleconferences that NAHB has held in support of the Revive Housing campaign to an even 10 as we strive to make the press and public aware of housing's critical contribution to job growth in communities nationwide. Questions? Contact MondayMorningQuestions@nahb.com.
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Restructuring some commercial real estate loans just got easier
 thanks to final regulations that have been issued by the Treasury Department. The regulations (T.D. 9463) cover certain technical requirements, including collateral guarantees. As a result, investors in Real Estate Mortgage Investment Conduits (REMICs) will not be subject to tax penalties when attempting to restructure or refinance certain real estate loans. This is a departure from the old rules, under which the tax benefits offered by REMICs were penalized if the loans were significantly altered. The new rules will improve conditions for securitizing mortgages in REMICs or at least remove certain tax obstacles as lenders and market participants seek to work out loans before they become troubled. The final regulations went into effect Sept. 16. They do NOT apply to Real Estate Investment Trusts (REITs), although the IRS may in the future expand them to include such investment vehicles. For more information, send an email to: MondayMorningQuestions@nahb.com.
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NAHB's new brand and logo are ready for your use...
As many readers will recall, earlier this year our Board of Directors adopted a new branding structure and logo for NAHB. Now, after much hard work and testing, we are rolling out our related resources for members and HBAs. To get you started, you'll need to access the NAHB Brand Identity Guidelines for NAHB Members and Affiliated State and Local Associations, which are available at: www.nahb.org/logoform. Here, users will be asked to acknowledge that you have reviewed the guidelines and accept their terms of use. Once you do this, you will be given access to the logo Web page. For access to this page after you have accepted the terms of use, you can go straight to www.nahb.org/logos.
Please note that NAHB will be undergoing a "rolling" implementation of the new brand, which means that you can expect to see both our old logo and our new one in use for quite some time to come. To minimize costs, our staff will be using up existing stock of letterhead, brochures and other materials before printing new resources with the new logo; our locals and members are encouraged to do the same. At some point in the future, NAHB will ask that all affiliated associations and members transition to the new logo – but until then, please feel free to use whatever materials you may have that employ the old logo. Of course, as you order reprints of materials, you should use the new NAHB logo in accordance with the NAHB Brand Identity Guidelines. Similarly, websites and other electronic communication vehicles can be updated with the new logo at your earliest convenience. Please direct any questions to the Member Service Center at 800-368-5242, x0 or info@nahb.org.
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Resolutions approved at the Fall Board meeting in Chicago
have now been posted on NAHB.org. A total of three resolutions/recommendations were brought to the Board floor for consideration, each of which were overwhelmingly passed by voice vote. These include:
1. Promoting Sound and Equitable Lending Practices for Builder Financing;
2. Interior Designer Licensing; and
3. Smarter Growth Policy Statement.
You can link to the full-text of each of these approved policies by clicking on their titles above. Please direct any questions on these items or on the policymaking process itself to MondayMorningQuestions@nahb.com.
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NAHB's Quick Issues Index document
was updated
 in preparation for last week's Fall Board of Directors Meeting in Chicago. This document provides you with a quick summary of top NAHB Advocacy issues on which there have been significant developments in recent months. It also tells you where to go for more information on any topic, with links to online resources as well as contact information for staff experts. The Quick Issues Index is available at: www.nahb.org/issuesindex (Note: you must be logged into the NAHB Web site with your member ID and password to view this resource). Contact: Samantha Silver, x8450.
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Be a STAR at the International Builders' Show this January!
 Are you or a family member a talented singer with definite star potential? If so, we have a fantastic potential opportunity for you. NAHB is excited to announce our first-ever "nahb STAR" contest, which is already generating lots of interest among the membership. This is a singing competition that is open ONLY to NAHB members and their immediate family. The winner will be tapped to sing the National Anthem at the Grand Opening Ceremonies of the 2010 IBS in Las Vegas on Jan. 19. This contest is strictly for those with "amateur" status – no fair nominating your aunt who's a Broadway diva. Complete rules and details are available at www.BuildersShow.com/Star. And when the time comes to vote on a winner, all NAHB members will have a chance to be Simon Cowell for a moment by logging on to the BuildersShow.com Web site and picking their favorite! Please send any questions on the contest to nahbstar2010@gmail.com.
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NAHB bids farewell to housing visionary Kevork Hovnanian,
 a prominent member of NAHB and the New Jersey Builders Association whose company, Hovnanian Enterprises Inc., was ranked as the sixth-largest builder of homes in the country based on revenue last year. Kevork passed away from congestive heart failure on Sept. 24 in New York; he was 86 years old. After immigrating to America from Iraq, he and his three brothers started their company in 1959 with just $20,000. Today it is a publicly-traded powerhouse that builds homes in 18 states. Kevork served as its president from its very beginning until 1987, then remained CEO until 1997, when he turned over the position to his son, Ara. In the course of his very successful career, he was awarded many distinguished honors, including Harvard University's Dively Award for Leadership in Corporate and Public Initiatives, and was a noted philanthropist in the medical field. Our thoughts are with his wife of more than 60 years, Sirwart, his five children and 13 grandchildren.
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NAHB offices will be closed on Monday...
Due to the federal Columbus Day holiday, NAHB will not be open for business on Oct. 12. But never fear, we'll be right back in the action on Tuesday. Here's wishing all our readers a pleasant and safe long weekend!
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