Updated: Bush Drops Resistance to Housing Bill; Passes House

Despite his objections over a $3.9 billion provision that would assist communities devastated by foreclosures, President George W. Bush has dropped his opposition to housing rescue legislation. He was previously threatening to veto the legislation. The housing rescue package, which the House of Representatives passed late July 23, 2008, outlines approximately 20 various provisions, including establishing a new regulator for Fannie Mae and Freddie Mac, creating a program within the FHA (Federal Housing Administration) to refinance distressed loans and providing $3.9 billion in funding to stabilize communities devastated by the mortgage crisis. Bush’s veto threat regarded the $3.9 billion emergency stabilization funding, which would be used to purchase and rehabilitate foreclosed homes in communities hardest hit by the mortgage crisis. One concern for this provision was that the fund would be used to bail out lenders. Advocating for this legislation, Enterprise created the Save America’s Neighborhoods campaign, a coalition of national organizations formed to urge Congress to approve the funding. The legislation includes a series of provisions designed to stabilize the LIHTC program, explains Peter Lawrence, senior policy director, Enterprise Community Partners Inc. The leading item, he says, is a 10 percent increase in state allocations. “A lot of deals on the table couldn’t be done before this legislation.” Enhancing the affordable housing component of the Government Sponsored Enterprises (GSEs), the legislation will raise the loan limits in high-cost areas and tighten the targeting requirements to ensure liquidity for owner-based and rental markets for low- and very-low income families. “Organizations like Enterprise and other multifamily providers will be able to increase the number of families they serve and decrease the gap,” Ali Solis, vice president of public policy at Enterprise, tells MHN. The legislation also creates a Housing Trust Fund and a Capital Magnet Fund, which will be used for the construction of affordable rental housing. “This is the first time ever that we will have a permanent affordable housing trust fund supported by the revenues of the GSEs,” Solis notes. If, and when, the legislation is enactedc, the emergency stabilization funding would be distributed as quickly as possible. A distribution formula needs to be put together within 60 to 90 days after the legislation’s passage, explains Solis. However, she notes that local and state partnerships are in place to put together a solution. “There are so many provisions in this bill that we believe every region in the U.S. will benefit from the progress of the legislation,” says Solis. “This is landmark legislation that should be celebrated. We are thankful that Congress has worked together to get this done.”This article first appeared on www.multihousingnews.com, affiliated with Multi-Housing News magazine.