The legislation, which was signed into law by President Obama today (Nov. 6), will extend  the $8,000 credit for first-time home buyers for sales contracts entered into by April 30, 2010 and closed by June 30. Further, it has been expanded to include a new $6,500 credit for owners of existing homes who are purchasing a new principal residence. An existing home owner can claim the $6,500 tax credit if they have been residing in their principal residence for five consecutive years out of the last eight.

In more good news, the income eligibility limits to claim the full credit amount for both groups of home buyers have been raised from $75,000 for single taxpayers and $150,000 for married taxpayers filing a joint return to $125,000 for individuals and $225,000 for married couples.
NAHB’s consumer-oriented Web site, www.FederalHousingTaxCredit.com, provides complete details on the enhanced home buyer tax credit. NAHB will soon launch a set of resources at www.nahb.org/taxcreditresources to help our members understand and promote the new tax credit. Be sure to visit the site early next week.  Knowing that many of our members may already be getting questions about the new law, NAHB on Nov. 5 sent out a PRx to Executive Officers to provide them with talking points and a fact sheet on the expanded home buyer tax credit.

For NOLs, the new law will allow all businesses -- regardless of size -- with operating losses in 2008 or 2009, not both, to claim refunds on taxes paid up to five years ago. Businesses can offset 100% of taxable income with NOLs carried back in years one through four and offset 50% of income in year five. Small businesses with less than $15 million in gross receipts would be able to claim a five-year carryback for 2008 losses under the American Recovery and Reinvestment Act and for 2009 losses under the new law. The new net operating loss provisions will throw a lifeline to struggling businesses, allowing them to continue making payrolls, paying business loans and otherwise keep their doors open until the economic recovery takes hold.

Immediately following congressional passage, NAHB Chairman Joe Robson sent a memo to the entire federation about the importance of this legislation to the housing industry and how NAHB was instrumental in helping to get the bill passed. The communiqué was also delivered to the EOs via the PRx Exchange. Additionally, NAHB issued a press release applauding Congress on extending and enhancing the home buyer tax credit.

On Nov. 5, the House approved the legislation by a vote of 403 to 12, less than 24 hours after it sailed through the Senate by a unanimous 98-0 vote. Prior to the congressional votes, NAHB sent letters to leaders in each chamber designating passage as a “key vote” due to its importance to the housing industry. In addition, NAHB issued a Legislative Alert earlier this week urging our members to call their senators and representatives immediately and tell them to support the tax credit and NOL carryback because they will preserve and create jobs, stabilize the housing market and provide critical stimulus to the nation’s economy. For more information on the legislation, contact Greg Brown at 1-800-368-5242, ext. 8421.

In the interim, NAHB has worked tirelessly to make this a reality. On the legislative and grassroots front, our lobbyists have been in continuous contact with House and Senate congressional leaders and encouraging action on several fronts to achieve our housing priorities. We have testified before Congress on several occasions on the need for lawmakers to act quickly on the tax credit and our other housing priorities and warned lawmakers that a failure to act quickly could derail the fragile housing recovery even before it has time to take hold.

During key stages of the campaign, we activated our grassroots network to meet with their lawmakers when they were in their home districts and to visit them on Capitol Hill. We have inundated congressional offices with more than 10,000 e-mails and 1,500 phone calls urging senators and representatives from both parties to extend and expand the home buyer tax credit to create jobs, spur home sales, reduce foreclosures, stabilize home values and push housing and the economy to higher ground.

NAHB’s Economics and Housing Policy experts crunched the numbers and estimated the economic impacts of the proposals. This information, particularly the number of jobs and home sales created by extending and enhancing the home buyer tax credit, was circulated among lawmakers and quoted widely in the media. It made a compelling argument for our case.
 
A Housing Coalition Second to None

To help get this vital legislation across the finish line, NAHB worked with the National Association of Realtors and Mortgage Bankers Association during the past few months to form the most powerful coalition to speak for our industry. Our joint lobbying, grassroots and public relations efforts were heard loud and clear by Washington policymakers.

Appearing at the same Senate Banking Committee hearing, our three organizations brought different perspectives in testifying on the urgent need to take action on the home buyer tax credit. We also sent a joint letter to the Obama Administration calling for the tax credit to be extended and made available to all purchasers of a principal residence.

On the public relations front, NAHB and the National Association of Realtors recently ran a full-page ad in the Wall Street Journal and USA Today calling on Congress to extend and expand the home buyer tax credit to create jobs and put America back to work. To bolster this message to Congress, NAHB, the Realtors and the Mortgage Bankers Association for the past several weeks ran a series of joint advertisements in the Capitol Hill publications Roll Call, Politico, CQ Weekly, the National Journal and The Hill with the message, “Congress: Don’t Let America’s Real Estate Recovery Expire.”

Local Builders Lend Their Voices to Our Effort

To further increase public awareness on our housing priorities, NAHB during the past several weeks conducted several regional teleconferences with builders across the nation to generate media attention for our campaign goals. Builders provided perspectives on their individual housing markets and the urgent need for congressional action on the home buyer tax credit and other important housing initiatives. EOs, HBA presidents and other builder constituents across the country utilized NAHB’s resources at www.nahb.org/ReviveHousingNow, a one-stop site that contains information to call or e-mail your members of Congress, print ads, op-ed letters for use in local newspapers and more.

Our national media outreach has also been quite successful. NAHB CEO Jerry Howard conducted a New York media tour in mid-September, where he discussed the need to extend the home buyer tax credit with reporters at the Wall Street Journal, the New York Times and CNN/Money. He delivered the same message in interviews with Fox Business News and Bloomberg Television. Other major media outlets in recent weeks have reported on NAHB’s housing priorities, including CNBC, U.S. News & World Report, MarketWatch, AP, Reuters, The Today Show, The Washington Post, the Chicago Tribune and the Baltimore Sun.

Across the nation, 16 op-eds in 11 states were published in favor of NAHB’s position on extending the tax credit, including nine that were placed by local HBAs. Our locals proved very adept at promoting media coverage to push our campaign goals. A prime example was a YouTube video by the HBA of Kansas, which has attracted a great deal of attention on the Web and was sent by the HBA to their representatives in Congress. 

NAHB Public Affairs has worked diligently to promote the tax credit to consumers. Our Web site at www.federalhousingtaxcredit.com, which provides detailed information on the tax credit compiled by the NAHB Economics and Housing Policy team, has attracted five million visits so far, and we’ve charted thousands of followers on Twitter, FaceBook and YouTube combined. To further generate public interest, NAHB created a consumer-focused Web site at www.ReviveHousingNow.com to urge potential buyers to contact their lawmakers and ask them to extend the home buyer tax credit.

The actions listed above highlight our efforts to get this legislation passed and certainly demonstrate the value of NAHB to our membership. On an issue of enormous importance to the housing industry, the entire NAHB federation has worked together to get the job done. I want to thank everyone for their hard work. Together, we have made a difference for our industry." [return to top]

On the floor of the Senate, Finance Committee Chairman Max Baucus (D-Mont.) said that, “It’s important that this tax credit does not become a permanent fixture in the tax code. Our amendment would end the credit on April 30 of next year. This extension would get us through the winter – traditionally the worst season for real estate. Our amendment would jump-start the housing market as it enters the summer months of 2010.”  Baucus added that the seven-month extension of the tax credit would be “long enough to encourage home buyers to buy homes, but it’s short enough to remain fiscally responsible.” [return to top]

Specifically, NAHB voiced concern with the broad employer mandate imposed by H.R. 3962 as the vehicle to provide health insurance or universal coverage to all employees. The letter stated that the employer mandate and minimum benefit requirements stipulated in the legislation would remove “the flexibility for employers to provide health plans that best fit the needs of their workforce."

NAHB also has significant concerns with the surtax on taxpayers with adjusted gross incomes of $500,000 for single taxpayers and $1 million for joint filers as well as the change in treatment of S Corporations and other pass-through entities.  Many small businesses, such as home builders, are structured as pass-through entities and pay for their business taxes at the individual level. “The surtax and pass-through provisions will have significant impacts on these small businesses,” the letter said. “Furthermore, by not indexing the surtax to the inflation rate, the number of home building firms subject to this tax will continue to increase in years to come.”

Noting that NAHB is a strong advocate of universal access to health coverage and encourages a market-based approach over a guaranteed mandate, the letter said that H.R. 3962  fails to include meaningful medical malpractice reforms, preservation of association-sponsored health programs and tax-deferred individual medical savings accounts -- methods that NAHB supports to improve our current health care system. "Unfortunately as currently drafted, H.R. 3962 does not meet these goals and therefore NAHB must oppose the legislation,” the letter concluded. For more information, contact Carlos Gutierrez at ext. 8242. [return to top]

Of note to home builders, the bill has energy efficiency standards for buildings that are completely different from its House counterpart. The Senate bill would require the EPA, or other agency head designated by the President, to set efficiency targets for a national energy code, but does not specify percentage increases or dates of compliance. NAHB continues to work with Senate staff to address our concerns with mandatory energy efficiency targets. 

Meanwhile, Sens. John Kerry (D-Mass.), Joe Lieberman (I-Conn.) and Lindsey Graham (R-S.C.) are working to craft a separate bipartisan measure that would seek to expand the number of nuclear reactors and oil drilling off U.S. coasts. Many senators are taking a wait-and-see approach to determine whether to support the Kerry-Lieberman-Graham effort or the bill approved by the Senate committee as the main vehicle for any legislative action on the Senate floor. NAHB does not expect the full Senate to take up climate legislation until next year. NAHB continues to monitor developments closely. For more information, contact Elizabeth Odina at ext. 8570. [return to top]