[Congressional Record Volume 147, Number 30 (Thursday, March 8, 2001)]
[Extensions of Remarks]
[Page E316]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




    A BILL TO AMEND THE INTERNAL REVENUE CODE OF 1986 TO REPEAL THE 
 REQUIRED USE OF CERTAIN PRINCIPAL REPAYMENTS ON MORTGAGE SUBSIDY BOND 
  FINANCINGS TO REDEEM BONDS, TO MODIFY THE PURCHASE PRICE LIMITATION 
 UNDER MORTGAGE SUBSIDY BOND RULES BASED ON MEDIAN FAMILY INCOME, AND 
                           FOR OTHER PURPOSES

                                 ______
                                 

                           HON. AMO HOUGHTON

                              of new york

                    in the house of representatives

                        Thursday, March 8, 2001

  Mr. HOUGHTON. Mr. Speaker, I am pleased to join my colleague from 
Massachusetts, Mr. Neal, in introducing our bill, ``The Housing Bond 
and Credit Modernization and Fairness Act.'' Our joining together in 
introducing this bill today is indicative of the broad bipartisan 
support Housing Bonds and the Low Income Housing Tax Credit (Housing 
Credit) programs enjoy.
  The Congress has an unusual opportunity, without creating any new 
program, to create new housing opportunity for tens of thousands of 
low- and moderate-income families every year. All it will take is 
enactment of minor legislative changes to eliminate obsolete provisions 
in the two principal Federal programs that finance the production of 
affordable housing: Housing Bonds, or single family Mortgage Revenue 
Bonds (MRBs), as they are commonly known, and the Housing Credit.
  This bill builds on important legislation Representative Neal and I 
introduced and supported in the last two Congresses to increase the 
Housing Bond authority by nearly 50 percent to make up for the effects 
of inflation. In the 106th Congress this piece of legislation, as well 
as the Housing Credit legislation, had the phenomenal support of 375-
plus House cosponsors from both parties, from all regions of the 
country, and from rural and urban districts. Finally, in late 2000, 
legislation applicable to both the Housing Bonds and Housing Credit was 
enacted into law.
  The Housing Bond and Credit Modernization and Fairness Act does three 
things. First, the bill would repeal the Ten-Year Rule, a provision 
added to the MRB program in 1988 that prevents States from using 
homeowner payments on such mortgages to make new mortgages to 
additional qualified purchasers. States estimate that, between 1998 and 
2002, the Rule will mean the loss of over $8.5 billion in mortgage 
authority, denying tens of thousands of qualified lower income 
homebuyers each year the ability to obtain affordable MRB-financed 
mortgages. Second, the bill would replace the present unworkable limit 
on the price of the homes these mortgages can finance with a simple 
limit that works. No reliable comprehensive data exists in all areas of 
the country to determine average area home prices. The current price 
limits were issued in 1994 based on 1993 data. They are obsolete and 
well below current home price levels in most parts of the country. Many 
qualified buyers simply cannot find homes that are priced below the 
outdated limits.
  The answer is to modify the present limit, set in Washington, with a 
simple formula limiting the purchase price to three and a half times 
the qualifying income under the program.
  We would like to acknowledge the leadership and support of our 
colleague Representative Bereuter, who introduced last year and 
reintroduced in this Congress this element of our legislation as a 
freestanding bill.
  Finally, the bill makes Housing Credit apartment production viable in 
rural areas by allowing statewide median incomes as the basis for the 
income limits in that program. This change would apply the same 
methodology in determining qualifying income levels that is used in the 
MRB Program. HUD data shows that current income limits inhibit Housing 
Credit development in at least 1,700 of the 2,364 non-metropolitan 
counties across the country.
  It is noteworthy that the changes proposed by The Housing Bond and 
Credit Modernization and Fairness Act were endorsed by the bipartisan 
National Governors Association at its recently concluded meeting. The 
governors know how important the Housing Bond and Housing Credit 
programs are in giving states the ability to meet the housing needs of 
low- and moderate-income families. The governors know that we need to 
do more to ensure that the important increase in authority that over 
375 House Members cosponsored last year really can reach as many 
qualified people as possible.
  Even after the passage of last year's legislation, over 100,000 
qualified lower income homebuyers are not able to get an affordable MRB 
funded mortgage and over 70 percent of non-metropolitan counties across 
the country will be inhibited in full use of the Housing Credit 
program.
  For those of you that cosponsored those bills last year, and those of 
my colleagues who are new to the Congress, we hope you will join our 
bipartisan effort to see that these important provisions are enacted as 
part of tax legislation this year.

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