[Congressional Record Volume 149, Number 2 (Wednesday, January 8, 2003)]
[Extensions of Remarks]
[Page E46]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   THE HOUSING BOND AND CREDIT MODERNIZATION AND FAIRNESS ACT OF 2003

                                 ______
                                 

                           HON. AMO HOUGHTON

                              of new york

                    in the house of representatives

                       Wednesday, January 8, 2003

  Mr. HOUGHTON. Mr. Speaker, I am pleased to join my colleague from 
Massachusetts, Representative Richard Neal, in introducing our bill, 
``The Housing Bond and Credit Modernization and Fairness Act of 2003''. 
My collaboration with Mr. Neal today is indicative of the broad 
bipartisan support Housing Bonds and the Low Income Housing Tax Credit 
(Housing Credit) programs enjoy.
  The Congress has a golden opportunity, without creating any new 
program or asking for any appropriation of Federal money, to create new 
housing opportunity for tens of thousands of low- and moderate-income 
families every year. All it will take is enactment of simple 
legislation 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 is identical to the one Representative Neal and I 
introduced in the 107th Congress, which earned the support of 360 House 
cosponsors from both parties, from all regions of the country, and from 
rural and urban districts.
  The Housing Bond and Credit Modernization and Fairness Act of 2003 
would do 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. For each day the Ten-Year Rule is in effect, 
states lose millions of dollars in financing for first-time home buyer 
mortgages, amounting to more than $12 billion in mortgage authority 
between 2001 and 2005. This represents nearly half of the entire Bond 
cap increase Congress enacted in 2000. Our bill would eliminate the 
Ten-Year Rule to allow states to use mortgage payments to finance 
additional lower income 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 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 replace the present limit, set in Washington, by a 
simple formula limiting the purchase price to three and a half times 
the qualifying income under the program.
  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 for determining qualifying income levels used in the MRB 
Program. HUD data shows that current income limits inhibit Housing 
Credit development in more than 1,300 nonmetropolitan counties across 
the country.
  I am pleased to tell my colleagues that the changes proposed by the 
Housing Bond and Credit Modernization and Fairness Act of 2003 have 
been endorsed by the bipartisan National Governors Association, the 
National Council of State Housing Agencies, and every major national 
housing organization. These groups 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.
  Today, I ask you to join in a bipartisan effort to see that these 
important provisions are enacted as part of tax legislation this year.

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