[Congressional Record Volume 149, Number 2 (Wednesday, January 8, 2003)]
[Extensions of Remarks]
[Page E48]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




       THE HOUSING BOND AND CREDIT MODERNIZATION AND FAIRNESS ACT

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                          HON. RICHARD E. NEAL

                            of massachusetts

                    in the house of representatives

                       Wednesday, January 8, 2003

  Mr. NEAL of Massachusetts. Mr. Speaker, I join my colleague and 
friend, Representative Amo Houghton, in reintroducing legislation to 
make three important changes to two of the most popular and efficient 
housing programs before Congress: the Mortgage Revenue Bond (MRB) 
program and the Low Income Housing Tax Credit program.
  First, this bill repeals the Ten-Year Rule, a provision of the MRB 
program that restricts states from using homeowner mortgage payments to 
make new mortgages to qualified purchasers. This provision is obsolete 
and detrimental to the program. Every day, states lose millions of 
dollars in financing for first-time homebuyer mortgages due to this 
handcuffing provision. Our bill removes this unnecessarily restrictive 
provision to allow states to finance additional lower income mortgages.
  Next, the bill replaces the present limit on the purchase price of 
the homes these mortgages can finance. The plain fact is there are no 
reliable comprehensive data that exist to determine average area home 
prices. The current price limits were issued in 1994 based on 1993 data 
and are well below current home price levels in most parts of the 
country. We propose a simpler formula limiting the purchase price to 
three and a half times the qualifying income under the program. This 
will work to preserve the goals of current law while providing a 
realistic limit on the program for almost all areas of the nation.
  Finally, the bill facilitates lower income apartment production in 
rural areas by allowing states to use the greater of statewide median 
incomes or area median incomes as the basis for the income limits in 
the Housing Credit program. It is clear that the current rules do not 
provide sufficient incentives to build apartments in very low-income 
rural areas. Our bill addresses this by applying to the Housing Credit 
program the same methodology used in the MRB Program to determine 
qualifying income levels.
  This bill is identical to the one 360 of our House colleagues 
cosponsored in the last Congress, which earned the support of the 
National Governors Association and every major national housing 
organization along the way.
  Mr. Houghton and I believe these changes will ensure a strong, 
effective housing program that will meet the needs of our constituents 
now and well into the future. We ask for your support to ensure that 
these important provisions are enacted as part of tax legislation this 
year.

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