[Congressional Record Volume 149, Number 80 (Tuesday, June 3, 2003)]
[Senate]
[Pages S7251-S7255]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. STABENOW (for herself, Mr. Smith, and Mr. Dayton):
  S. 1175. A bill to amend the Internal Revenue Code of 1986 to allow a 
refundable credit against income tax for the purchase of a principal 
residence by a first-time homebuyer; to the Committee on Finance.
  Ms. STABENOW. Mr. President, I believe ``home'' is one of the warmest 
words in the English language. At the end of a long day, I think the 
favorite phrase of every hardworking working man and woman in this 
country is: ``Well, I'll see you tomorrow. I'm going home now.''
  That is why I rise today to introduce the First Time Homebuyers' Tax 
Credit Act of 2003.
  The bill I am introducing will spread that warmth by opening the door 
to homeownership to millions of hardworking families, helping them 
cover the initial down payment and closing costs.
  This initiative is in keeping with our longstanding national policy 
of encouraging homeownership.
  Owning a home has always been a fundamental part of the American 
dream.
  We, in Congress, have long recognized the social and economic value 
in high rates of homeownership through laws that we have enacted, such 
as the mortgage interest tax deduction and the capital gains exclusion 
on the sale of a home.
  Over the life of a loan, the mortgage interest tax deduction can save 
homeowners thousands of dollars that they could use for other necessary 
family expenses such as education or health care.
  These benefits, however, are only available to individuals who own 
their own home.
  It is important also to note that owning a home is a principle and 
reliable source of savings as homeowners build equity over the years 
and their homes appreciate.
  For many people, it is home equity--not stocks--that help them 
through the retirement years.
  In addition, owning a home insulates people from spikes in housing 
costs.
  Indeed, while rents may go up, the costs of a monthly mortgage 
payment, in relative terms, will go down over the course of the 
mortgage.
  In my own State of Michigan, the homeownership rate of 74 percent is 
the third highest in the Nation and well above the national rate of 66 
percent.
  In Oregon, the home State of my bill's lead Republican sponsor, 
Senator Gordon Smith, the homeownership rate is 64.3 percent--about 2 
percent below the national average.
  However, as impressive as these numbers may initially sound, not 
everyone enjoys the benefits of homeownership.
  For example, homeownership in Michigan among whites is 78 percent; 
Native Americans 60 percent; Hispanics 55 percent; African Americans 51 
percent; and Asians 50 percent.
  A national study by the Fannie Mae Foundation found that in the top 
third of income levels, 44 percent of people under the age of 31 owned 
their own home.
  But, for the lowest third on the income scale, only 15.6 percent 
owned their own home--a 28 percent gap!
  Why do we face these disparities? Clearly, one of the biggest 
barriers to homeownership for working families is the cost of a down 
payment and the costs associated with closing a mortgage.
  According to the Mortgage Bankers Association, typical closing costs 
on an average sized loan of $175,000 can approach approximately $4,000.
  Even with relatively recent mortgage products that allow a 
downpayment of as little as 3 percent of the value of a home, total 
costs can quickly approach over $9,000.
  This is an impossible amount to save for those who are scraping by, 
working hard to make ends meet.
  To address this problem, I am introducing the First Time Homebuyers' 
Tax Credit Act of 2003.
  My bill authorizes a one-time tax credit of up to $3,000 for 
individuals and $6,000 for married couples.
  This credit is similar to the existing mortgage interest tax 
deduction in that it creates incentives for people to buy a home.
  To be eligible for the credit, taxpayers must be first-time 
homebuyers who were within the 27 percent tax bracket or lower in the 
year before they purchase their home. That is $67,700 for single 
filers, $96,700 for heads of household, $112,850 for joint returns. 
There is a dollar-for-dollar phase-out beyond the cap.
  Normally, tax credits like this are an after-the-fact benefit. They 
do little to get people actually into a home.
  What is particularly innovative and beneficial about the tax credit 
in this bill, however, is that, for the first time, the taxpayer can 
either claim the credit in the year after he or she buys a first home 
or the taxpayer can transfer the credit directly to a lender at 
closing.
  The transferred credit would go toward helping with the down payment 
or closing costs. This is cash at the table.
  As mandated in the bill, the eligible homebuyer would have the money 
for the lender from the Treasury within 30 days of application.
  I am happy to say that this legislation already has strong support. 
Among those who have already written to me in support of this concept 
are:
  The American Bankers Association; America's Community Bankers; the 
Housing Partnership Network; the National Housing Conference; the 
National Congress for Community Economic Development; the National 
Council of La Raza; the National Association of Affordable Housing 
Lenders; the Manufactured Housing Institute; Fannie Mae; Freddie Mac; 
National Community Reinvestment Coalition; Standard Federal Bank; 
Habitat for Humanity, and, the National American Indian Housing 
Council.
  I ask unanimous consent that copies of their letters be printed in 
the Record.
  There being no objection, the letters were ordered to be printed in 
the Record.

                                                       Habitat for


                                       Humanity International,

                                     Washington, DC, May 12, 2003.
     Hon. Debbie Stabenow,
     U.S. Senate, Hart Senate Office Building, Washington, DC.
       Dear Senator Stabenow: On behalf of Habitat for Humanity 
     International, I want to commend you for your leadership on 
     issues of affordable housing and for putting forth 
     legislation--the First-Time Homebuyers Tax Credit Act--that 
     will enable low-income families with little or no savings to 
     overcome the two largest obstacles faced on the path to 
     homeownership; downpayments and closing costs.
       As you know, Habitat for Humanity has witnessed, through 
     the sale of over 135,000 homes worldwide to Habitat homeowner 
     families, that homeownership is one of the most important 
     personal and financial investments for individuals, families, 
     and communities. By expanding first-time homeownership 
     opportunities to thousands of low-income families via a one-
     time tax credit, the First-Time Homebuyers Tax Credit Act 
     will help close the homeownership gap and provide new wealth-
     building opportunities for thousands who would perhaps in no 
     other way experience the American Dream.
       Habitat for Humanity affiliates across the country address 
     the issue of daunting financial barriers posed by 
     downpayments and

[[Page S7252]]

     closing costs by charging only a minimal amount or by 
     enabling potential homeower families to forgo the requirement 
     altogether, relying on a homeowner's ``sweat equity'' in the 
     construction of their home as sufficient deposit. While this 
     legislation may not directly affect the work of our Habitat 
     affiliates, HFHI is pleased to offer our support to you as we 
     work together to provide new homeownership opportunities to 
     strengthen families, revitalize neighborhoods, and close the 
     homeownership gap among racial groups.
       Again, we applaud your commitment to affordable housing 
     issues and for sponsoring legislation that reflects your 
     conviction that all Americans should have a decent, safe, and 
     affordable place in which to live. If we can be of any 
     assistance, please do not hestitate to contact me or Amy 
     Randel, Director of Government Relations, at 202/628-9171.
           Gratefully yours,
                                                        Tom Jones,
     Vice President, HFHI/Managing Director.
                                  ____



                                        Standard Federal Bank,

                                         Troy, MI, March 27, 2003.
     Hon. Debbie A. Stabenow,
     Hart Senate Office Building,
     Washington, DC.
       Dear Senator Stabenow: Standard Federal Bank National 
     Association (``SFB'') appreciates the opportunity to comment 
     on the proposed First-Time Homebuyers' Tax Credit Act of 
     2003. This letter is written on behalf of SFB and all of its 
     LaSalle Bank Corporation (``LBC'') affiliates.
       LBC is a subsidiary of ABN AMRO Bank N.V. (``Bank'') which 
     is headquartered in Amsterdam, the Netherlands. The Bank has 
     over $519 billion in assets, approximately 111,000 employees, 
     and a network of approximately 3,500 offices in over 70 
     countries and territories. The Bank maintains several 
     branches, agencies and offices in the United States. In 
     addition, ABN AMRO Incorporated, a full-service investment 
     banking, advisory, and brokerage firm, headquartered in New 
     York, New York, is also a subsidiary of the Bank.
       LBC is the financial holding company for the U.S. domestic 
     banking operations of the Bank and is headquartered in 
     Chicago. LBC is among the largest foreign financial holding 
     companies in North America with $90 billion in assets. The 
     U.S. operations of the Bank include LaSalle Bank National 
     Association, located in Chicago, Illinois, and Standard 
     Federal Bank National Association, located in Troy, Michigan. 
     These banks maintain over 400 offices in Illinois, Michigan, 
     and Indiana.
       The advantages of home ownership are both obvious and 
     clearly instrumental in providing a secure lifestyle to our 
     citizens. Owning one's own home is the primary source of 
     wealth building for most Americans. While rents and other 
     living expenses increase with inflation, the monthly mortgage 
     payment can remain constant, and in relative terms will 
     become an even smaller portion of the family's financial 
     obligations over time.
       An additional benefit to home ownership is the mortgage 
     interest tax deduction. Home owners can use the money they 
     save on taxes to meet other family expense, such as education 
     and health care, benefits which are not available to renters.
       We want to express our strong support for the concept of 
     expanding homeownership opportunities contained in the 
     proposed First-Time Homebuyers' Tax Credit Act of 2003, which 
     you have been instrumental in brining up for Congressional 
     approval. This legislation has the potential to provide a 
     significant opportunity for home ownership to many families 
     and individuals who are not able to meet the financial burden 
     of down payment and closing costs. The First Time Homebuyers' 
     Tax Credit, perhaps used in conjunction with other available 
     federal, state, and local homebuyers' incentive programs, 
     will bring the dream of owning one's own home well within the 
     grasp of many additional people.
       We understand that some details of the program, 
     particularly as it relates to the transfer of the tax credit 
     to a lender, remain to be worked out. However, we are 
     supportive of the concept of the tax credit and of income 
     limits for participation.
       We appreciate the opportunity to comment on this important 
     legislation and congratulate you for providing leadership to 
     this effort. We hope that our comments and our support will 
     assist in bringing the tax credit program to fruition for the 
     benefit of first time homebuyers.
           Sincerely,
                                                   Mary M. Fowlie,
     Group Senior Vice President.
                                  ____

                                                National Community


                                       Reinvestment Coalition,

                                   Washington, DC, March 18, 2003.
     Hon. Debbie A. Stabenow,
     Senate Hart Building,
     U.S. Senate, Washington DC.
       Dear Senator Stabenow: On behalf of the National Community 
     Reinvestment Coalition (NCRC) and our over 600 member 
     organizations, we would like to express our most sincere 
     gratitude for taking time out of your busy schedule to 
     participate in our Congressional Luncheon held on Thursday, 
     March 13, 2003 at the Senate Hart Building.
       Our National Community Reinvestment Coalition (NCRC) 
     membership and staff truly enjoyed your encouraging and well-
     stated remarks. In addition, we are truly grateful to you 
     regarding your leadership in authoring ``The First Time 
     Homebuyers Tax Credit Act of 2003'', and we applaud you as a 
     champion for this cause. We would like for you to know that 
     we stand willing and anxious to assist you in the 
     introduction of this bill in the 108th Congress.
       Again, thank you for your pioneering spirit and continued 
     support in assisting those who have encountered economic 
     injustices. If NCRC can further assist you in eradicating 
     these causes, please do not hesitate to contact me directly 
     or our Director of Legislative and Regulatory Affairs, 
     Crystal Ford, at (202) 628-8866.
           Sincerely,
                                                      John Taylor,
     President and CEO.
                                  ____

                                             National Congress for


                               Community Economic Development,

                                   Washington, DC, April 25, 2003.
     Hon. Debbie Stabenow,
     U.S. Senator, Hart Senate Office Building, Washington, DC.
       Dear Senator Stabenow: The National Congress for Community 
     Economic Development (NCCED), on behalf of its more than 700 
     member community development corporations (CDCs) nationwide, 
     supports the proposed Homeownership Tax Credit bill to be 
     introduced by Senator Gordon Smith and you.
       The proposed legislation is innovative because it provides 
     homebuyers with the ability to transfer their tax credit to 
     the lender at closing in order to offset downpayment and 
     closing costs. Downpayment and closing costs have 
     consistently been one of the greatest barriers to 
     homeownership for low and moderate-income families.
       NCCED is the national trade association representing more 
     than 3,600 CDCs nationwide. We were founded in 1970 and since 
     have advocated for the community economic development 
     industry, whose work creates wealth, builds healthy and 
     sustainable communities, and achieves lasting economic 
     viability. NCCED fulfills its mission of service to its 
     members working in disinvested urban and rural communities 
     through education, resource development, advocacy, 
     networking, training, technology assistance, policy 
     initiatives, and strategic partnerships.
       NCCED's annual conference will be held this year in 
     Detroit, Michigan on October 9 and 10, 2003. We would welcome 
     the opportunity for you to share your thoughts with the 
     expected 500 conference attendees who will be there to learn 
     from the successes of Detroit's community development 
     corporations.
       Please contact me at (202) 289-9020 if you would like more 
     information. We look forward to working with you on policy 
     issues related to community revitalization.
           Sincerely,
                                                    Roy O. Priest,
     President and CEO.
                                  ____

                                           The Housing Partnership


                                                      Network,

                                         Boston, MA, May 12, 2003.
     Senator Deborah Stabenow,
     Hart Senate Office Building,
     Washington, DC.
       Dear Senator Stabenow: On behalf of the Housing Partnership 
     Network, I would like to extend our support for your proposed 
     Homeownership Tax Credit Act of 2002. This legislation would 
     authorize a one-time tax credit of up to $3,000 for 
     individuals and $6,000 for married couples to help pay 
     downpayment and closing costs for eligible first-time 
     homebuyers.
       The lack of funds for downpayment and closing costs is a 
     significant barrier for many lower income families who wish 
     to purchase a home in communities throughout the country. The 
     proposed homeownership credit is a particularly innovative 
     solution to help families overcome this obstacle because of 
     the transferability feature. By allowing buyers to transfer 
     the credit to their mortgage lender at closing, the credit 
     can provide an immediate infusion of cash to help the family 
     finance the home purchase.
       Founded in 1990, the Housing Partnership Network is a 
     national membership intermediary for regional nonprofit 
     housing partnerships. The Network currently has 77 members 
     operating in 37 states. (The full membership list is 
     attached.) The Network and our members sponsor a range of 
     programs to provide counseling, mortgage finance, and 
     downpayment assistance to promote affordable homeownerships 
     opportunities for low and moderate income families. The 
     Network's members have provided homeownership counseling to 
     over 225,000 families and have developed or rehabilitated 
     200,000 homes.
       The Network is a national funding intermediary for the HUD 
     Housing Counseling Program, and has provided $8 million to 
     support the counseling programs of 35 organizations over the 
     last eight years. Focused primarily on homebuyer education, 
     the program underwrites a range of services, including post-
     purchase, foreclosure prevention, and reverse equity mortgage 
     counseling. There are also homeless assistance and renter 
     counseling components.
       Our member that operates in the Washington, DC area, the 
     Community Development and Preservation Corporation, is 
     familiar with the federally authorized homeownership tax 
     credit in the District of Columbia. This program has been 
     quite successful and your bill would extend this benefit to 
     many other communities. The innovative

[[Page S7253]]

     transferability feature which you have included in the 
     legislation will make this resource even more useful to first 
     time homebuyers.
       The proposed credit is a creative approach to use the tax 
     system to facilitate homeownership for lower income families. 
     As this bill makes its way through the legislative process, 
     we would recommend that the income eligibility for the credit 
     be more narrowly drawn to ensure the public resource is more 
     efficiently targeted to lower income beneficaries.
       We appreciate the leadership you have provide in helping 
     address the nation's affordable housing crisis, and look 
     forward to working with you and your staff on this and other 
     issues.
           Sincerely,
                                                   Thomas Bledsoe,
     President.
                                  ____



                                  National Council of La Raza,

                                     Washington, DC, May 21, 2003.
     Hon. Deborah Stabenow,
     U.S. Senate,
     Washington, DC.
       Dear Senator Stabenow: On behalf of the National Council of 
     La Raza (NCLR), I write in support of the First-Time 
     Homebuyers' Tax Credit Act of 2003. NCLR is the nation's 
     largest Hispanic constituency-based organization, 
     representing more than 37 million Latinos nationwide. The 
     opportunity to become a homeowner is essential to NCLR's 
     mission to promote economic mobility and financial stability 
     within the Hispanic community.
       As you may know, Latino representation within the 
     homebuying market is increasing, accounting for 16.3% of all 
     new homebuyers from 1995 to 2000. That said, we remain 
     concerned that the rate of Hispanic homeownership, 48% 
     continues to lag behind the national average of 68%.
       Homeownership is often the largest and single most 
     important asset for a family, building wealth and improving 
     community stability. Further initiatives that facilitate 
     homeownership opportunities are essential for improving 
     Hispanic and low-income neighborhoods. Too many working 
     Latino families are unable to save enough money for closing 
     costs and downpayments, and are barred from attaining the 
     American dream of homeownership. Legislation such as yours 
     will break down barriers to homeownership, of which 
     affordability is a major component.
       NCLR looks forward to working with you on this and other 
     innovative affordable housing efforts. Please contact Janis 
     Bowdler, Housing Policy Analyst, (202) 776-1748, to discuss 
     further ways in which we can work together on these important 
     issues.
           Sincerely,
                                                   Raul Yzaguirre,
     President/CEO.
                                  ____

                                           National Association of


                                   Affordable Housing Lenders,

                                                   March 12, 2003.
     Hon. Debbie A. Stabenow,
     Hart Senate Office Building,
     Washington, DC.
       Dear Senator Stabenow: The National Association of 
     Affordable Housing Lenders (NAAHL), which represent America's 
     leaders in community lending and investment, strongly 
     supports the proposed First-Time Homebuyers' Tax Credit Act 
     of 2003, to help working families buy their first home 
     through a tax credit to help cover the downpayment and 
     closing costs.
       NAAHL is the only association devoted to increasing private 
     capital investment in low- and moderate-income communities. 
     NAAHL represents 200 organizations that are leaders in 
     lending and investing, including more than 70 insured 
     depository institutions, 45 non-profit providers and 800 
     individuals. Members include the who's who of private sector 
     lenders and investors in affordable housing and community 
     development: banks, thrifts, insurance companies, community 
     development corporations, mortgage companies, loan consortia, 
     financial intermediaries, pension funds, foundations, local 
     and national nonprofits, and public agencies.
       As you well know, the number of working families with 
     critical housing needs has continued to grow in recent years, 
     and working families have identified the lack of affordable 
     housing as one of their biggest problems. The First-Time 
     Homebuyers' Tax Credit Act would make it significantly easier 
     for many households to realize the American dream of 
     homeownership by providing them with a valuable resource for 
     overcoming one of the biggest barriers to homeownership--the 
     cost of a downpayment and closing costs.
       The proposed legislation evolves from longstanding public 
     policy to create incentives to homeownership because of the 
     inherent benefits of homeownership for both individuals and 
     society. Your bill effectively complements the existing 
     mortgage interest tax deduction--which saves families 
     thousands of dollars for other necessary expenditures after a 
     home has been acquired--by providing a tax credit that 
     facilitates the first-time purchase of a home for working 
     families. The legislation also addresses another key concern, 
     narrowing the homeownership gap between the lowest and 
     highest income groups, and among different races.
       NAAHL and our member companies look forward to working 
     closely with you to enact this legislation. We share your 
     goal of expanding homeownership opportunities, and sincerely 
     appreciate your commitment to helping make housing more 
     affordable.
           Sincerely,
                                                     Judy Kennedy,
     President.
                                  ____



                               Manufactured Housing Institute,

                                                   March 18, 2003.
     Hon. Debbie A. Stabenow,
     Senate Hart Office Building,
     Washington, DC.
       Dear Senator Stabenow: The Manufactured Housing Institute 
     (MHI) supports the ``First-Time Homebuyers' Tax Credit Act of 
     2003,'' which we understand you will be introducing in the 
     near future.
       This legislation would permit a one-time tax-credit to 
     first-time homebuyers which can be used for down payment and 
     closing costs in connection with the purchase of a principal 
     residence. This will help credit-worthy homebuyers overcome 
     the biggest impediment to purchasing a first home today--the 
     accumulation of sufficient funds to finance the down payment 
     and closing costs required at loan settlement.
       If structured properly, this program will help credit-
     worthy low- and moderate-income homebuyers to purchase and 
     remain in manufactured homes for many years to come.
           Sincerely,
                                                  Chris Stinebert,
     President, Manufactured Housing Institute.
                                  ____



                                                   Fannie Mae,

                                                     May 13, 2003.
     Hon. Debbie Stabenow,
     Senate Hart Office Building,
     Washington, DC.
       Dear Senator Stabenow: I understand that you will be 
     introducing a bill shortly that would provide for a one-time 
     tax credit for first time homebuyers in America's lowest tax 
     brackets.
       Your legislation, The Homeownership Tax Credit Act of 2003, 
     providing a tax credit of up to $3,000 for moderate-income 
     individuals, is the kind of assistance low and moderate 
     income families can harness to better afford the American 
     Dream of homeownership.
       As you know, the availability of funds for a downpayment is 
     a key barrier to homeownership. Our National Housing Survey 
     found that 32 percent of Americans say they would have 
     difficulty making a downpayment for the purchase of a home. 
     We at Fannie Mae support the use of tax credits to promote 
     homeownership and appreciate your work in this regard.
       We look forward to continuing our work with you to increase 
     the opportunity for more Americans to own homes of their own.
           Sincerely,
     William R. Daley.
                                  ____

                                      Washington, DC, May 12, 2003
     Hon. Debbie A. Stabenow,
     U.S. Senate, Hart Senate Office Building,
     Washington, DC.
       Dear Senator Stabenow: I am writing to commend your efforts 
     in introducing the ``FIRST-TIME HOMEBUYERS' TAX CREDIT ACT OF 
     2003''. Your legislation providing a tax credit to assist 
     first-time homebuyers with closing costs or down payment 
     assistance is very important
       Becasue of innovative products and services offered by the 
     banking industry, the United States has achieved the highest 
     homeownership rate in our nation's history. Nevertheless, as 
     you have recognized, millions still face barriers to 
     homeownership because of difficulty in accumulating an 
     adequate down-payment or because of costs associated with the 
     loan transaction. By providing assistance in the form of a 
     Federal tax rebate, paid before a borrower closes on a loan, 
     your legislation can make homeownership a reality for many 
     more Americans.
       Thank you for your leadership on this issue.
           Sincerely,
                                                  Floyd E. Stoner,

                             Executive Director, Congressional

                                      Relations and Public Policy,
     American Bankers Association.
                                  ____



                                                  Freddie Mac,

                                      Washington, DC, May 5, 2003.
     Hon. Debbie Stabenow,
     U.S. Senate, Senate Hart Office Building,
     Washington, DC.
       Dear Senator Stabenow: Freddie Mac is pleased to support 
     your legislation, The Homeownership Tax Credit Act of 2003. 
     We appreciate your extraordinary leadership in broadening 
     homeownership opportunities for America's working families 
     and look forward to continuing to work with you to achieve 
     this common goal.
       The Homeownership Tax Credit Act addresses one of the 
     primary barriers that many working families and other 
     Americans face in trying to buy a home, the cost of a down 
     payment and the closing costs involved in the purchase of a 
     home. Your legislation takes an innovative approach to 
     knocking down this barrier to homeownership by providing a 
     tax credit that the taxpayer can either claim in the year 
     after he or she buys a first home or the taxpayer can 
     transfer the credit directly to a lender at closing.
       At Freddie Mac, we work to help America's families realize 
     the dream of homeownership, by making low-cost mortgage 
     financing available to families every day. Freddie Mac has 
     made mortgage financing available for more than 27 million 
     homes. We are strongly committed to improving the quality of 
     life for homeowners and renters by making decent, accessible 
     housing a reality for America's families.

[[Page S7254]]

       As a member of the Senate Committee on Banking, Housing and 
     Urban Affairs, you have consistently demonstrated your 
     outstanding support for increasing homeownership in America, 
     and we look forward to working with you to help America's 
     families realize the American Dream of homeownership.
           Sincerely,
                                                    Dwight Fettig,
     Director, Congressional Relations.
                                  ____

         National American Indian Housing Council, Office of 
           Governmental Affairs,
                                       Washington, DC, May 8, 2003
     Hon. Debbie Stabenow,
     U.S. Senate,
     Washington, DC.
       Dear Senator Stabenow: I write today to let you know that 
     you have the support of the National American Indian Housing 
     Council for your Homeownership Tax Credit bill. We will be 
     watching for when the bill is introduced so we can be sure to 
     inform our members.
       The National American Indian Housing Council is a national 
     membership organization representing over 400 of the 564 
     federally-recognized tribes and their tribally designated 
     housing entities on low-income housing, mortgage lending, 
     finance and economic development issues. We currently have 
     ten member tribes from your home state of Michigan.
       Although much of our effort goes to helping tribal housing 
     agencies build and finance homes for tribal members where the 
     real estate market is nearly non-existent, we are always 
     looking to help those tribal members that are ready and able 
     for homeownership, but are driven away by high down-payments 
     and closing costs associated with buying a home. Your idea to 
     offer a transferable tax credit to first-time homebuyers 
     would be very helpful. We believe in the benefits of 
     homeownership and support your effort for making it less 
     cumbersome for lower income Americans.
       Please do not hesitate to contact me for further 
     information or for any assistance you might need in the 
     passage of this legislation.
           Sincerely,
                                                 Russell Sossamon,
     Chairman.
                                  ____

                                                     June 3, 2003.
     Hon. Debbie Stabenow,
     U.S. Senate, Hart Senate Office Building,
     Washington, DC.
       Dear Senator Stabenow: I want to take this opportunity to 
     express America's Community Bankers' support for your 
     initiative to provide Americans the opportunity to own their 
     own home. The First Time Homebuyers' Tax Credit Act of 2003 
     is greatly needed to address the current affordable housing 
     crisis in this country.
       Homeownership is an important goal for ACB. Our members 
     originate more than 25 percent of all U.S. mortgages. This 
     legislation will assist first-time homebuyers and lenders by 
     converting federal income tax credits into cash for down 
     payments and closing fees. We support giving qualified first-
     time buyers the option of either handing over their credit to 
     their lenders or using it later to reduce their own personal 
     income taxes.
       Over the years, ACB members have helped people with owning 
     a home. Your initiative will create additional opportunities 
     for our members to continue assisting first-time homebuyers 
     in securing a mortgage.
       ACB urges your colleagues in the House of Representatives 
     to support this legislation and increase the number of new 
     American homeowners. We applaud your efforts in offering a 
     solution to a problem many Americans face.
       Thank you for your leadership on this issue.
           Sincerely,

                                              Robert R. Davis,

                             Executive Vice President and Managing
                                   Director, Government Relations.

  Earlier today, at a press conference, Senator Smith and I were also 
joined by the Mortgage Bankers Association of America and we have 
received positive comments from the National Association of 
Homebuilders about my legislation.
  Clearly, the breadth and diversity of support is strong for this 
legislation.
  This is a bold and aggressive effort to reach out to a large number 
of working families to help them get into this first home.
  The Joint Committee on Taxation has estimated that up to 16.8 million 
working people would get into their first home over the next seven 
years because of this new tax credit.
  People like Christine Nelson, with whom I met this morning. Christine 
is a working mom. She works as an administrative assistant for a 
national association. She is carefully saving up to buy her first home.
  In addition to supporting her daughter, however, Christine has 
student loans that she is paying for.
  These multiple obligations make it difficult for her to come up with 
that $9,000 I mentioned earlier.
  The $3,000 tax credit she is eligible for would make a tremendous 
difference in her life. It would get her and her daughter into that 
first home much faster.
  We are working to send a message to Christine and other people all 
over the country that if you are working hard to save up enough to get 
into that first home, the Federal Government will make a strategic 
investment in your family--it will offer a hand up.
  This is not unlike what we already do through the mortgage interest 
tax deduction for millions of people who are fortunate enough already 
to own their own home.
  We certainly won't do all the hard work for you. You must be frugal 
and save and do most of the work yourself, but we, in Congress, 
understand that it is good for America to enhance homeownership.
  We also understand that this sort of investment in working families 
stimulates the economy.
  No one can deny that when the First Time Homebuyers' Tax Credit is 
enacted and used by millions of people, every single time the credit is 
used, it will be stimulative.
  Why?
  Because it means someone bought a house. And that generates economic 
activity for multiple small business people. Realtors. Lenders. House 
appraisers. Inspectors. Title insurers. And so on. And there is a 
ripple of economic activity by the new homeowners as they fix up their 
new homes and get settled in.
  Housing has been such a bright light in the sluggish economy we've 
faced for the last few years. My bill is designed to ensure that the 
housing sector remains a strong component of our economy.
  Finally, let me close by emphasizing how happy and proud I am that 
this tax legislation is bipartisan. In a closely divided Senate, and a 
closely divided Congress, it is so important to work across the aisle 
and Senator Smith, who is a real champion for good housing policy, is 
someone I want to work closely with on this bill and other important 
housing legislation. He understands how housing tax benefits help build 
strong communities and provide economic security for millions of 
families.
  I am committed to seeing this legislation passed. And, I welcome the 
chance to work with all of my colleagues to see the dream of 
homeownership expanded to all people.
  Home. Sentimentally, it is one of the warmest words in the English 
language. Economically, it is the key word in bringing millions of 
families in from the cold and letting them begin building wealth for 
themselves and their family.
  I ask unanimous consent that the text of this legislation be printed 
in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 1175

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``First-Time Homebuyers' Tax 
     Credit Act of 2003''.

     SEC. 2. REFUNDABLE CREDIT FOR FIRST-TIME HOMEBUYERS.

       (a) In General.--Subpart C of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     refundable credits) is amended by redesignating section 36 as 
     section 37 and by inserting after section 35 the following 
     new section:

     ``SEC. 36. PURCHASE OF PRINCIPAL RESIDENCE BY FIRST-TIME 
                   HOMEBUYER.

       ``(a) Allowance of Credit.--In the case of an individual 
     who is a first-time homebuyer of a principal residence in the 
     United States during any taxable year, there shall be allowed 
     as a credit against the tax imposed by this subtitle for the 
     taxable year an amount equal to 10 percent of the purchase 
     price of the residence.
       ``(b) Limitations.--
       ``(1) Maximum dollar amount.--
       ``(A) In general.--The credit allowed under subsection (a) 
     shall not exceed the excess (if any) of--
       ``(i) $3,000 ($6,000 in the case of a joint return), over
       ``(ii) the credit transfer amount determined under 
     subsection (c) with respect to the purchase to which 
     subsection (a) applies.
       ``(B) Inflation adjustment.--In the case of any taxable 
     year beginning after December 31, 2003--
       ``(i) the $3,000 amount under subparagraph (A) shall be 
     increased by an amount equal to $3,000, multiplied by the 
     cost-of-living adjustment determined under section 1(f)(3) 
     for the calendar year in which the taxable year begins by 
     substituting `2002' for `1992' in subparagraph (B) thereof, 
     and

[[Page S7255]]

       ``(ii) the $6,000 amount under subparagraph (A) shall be 
     increased to twice the $3,000 amount, as adjusted under 
     clause (i) for the taxable year.

     If the $3,000 amount as adjusted under clause (i) is not a 
     multiple of $10, such amount shall be rounded to the nearest 
     multiple of $10.
       ``(2) Taxable income limitation.--
       ``(A) In general.--If the taxable income of the taxpayer 
     for any taxable year exceeds the maximum taxable income in 
     the table under subsection (a), (b), (c), or (d) of section 
     1, whichever is applicable, to which the 25 percent rate 
     applies, the dollar amounts in effect under paragraph 
     (1)(A)(i) for such taxpayer for the following taxable year 
     shall be reduced (but not below zero) by the amount of the 
     excess.
       ``(B) Change in return status.--In the case of married 
     individuals filing a joint return for any taxable year who 
     did not file such a joint return for the preceding taxable 
     year, subparagraph (A) shall be applied by reference to the 
     highest taxable income of either such individual for the 
     preceding taxable year.
       ``(c) Transfer of Credit.--
       ``(1) In general.--A taxpayer may transfer all or a portion 
     of the credit allowable under subsection (a) to 1 or more 
     persons as payment of any liability of the taxpayer arising 
     out of--
       ``(A) the downpayment of any portion of the purchase price 
     of the principal residence, and
       ``(B) closing costs in connection with the purchase 
     (including any points or other fees incurred in financing the 
     purchase).
       ``(2) Credit transfer mechanism.--
       ``(A) In general.--Not less than 180 days after the date of 
     the enactment of this Act, the Secretary shall establish and 
     implement a credit transfer mechanism for purposes of 
     paragraph (1). Such mechanism shall require the Secretary 
     to--
       ``(i) certify that the taxpayer is eligible to receive the 
     credit provided by this section with respect to the purchase 
     of a principal residence and that the transferee is eligible 
     to receive the credit transfer,
       ``(ii) certify that the taxpayer has not received the 
     credit provided by this section with respect to the purchase 
     of any other principal residence,
       ``(iii) certify the credit transfer amount which will be 
     paid to the transferee, and
       ``(iv) require any transferee that directly receives the 
     credit transfer amount from the Secretary to notify the 
     taxpayer within 14 days of the receipt of such amount.

     Any check, certificate, or voucher issued by the Secretary 
     pursuant to this paragraph shall include the taxpayer 
     identification number of the taxpayer and the address of the 
     principal residence being purchased.
       ``(B) Timely receipt.--The Secretary shall issue the credit 
     transfer amount not less than 30 days after the date of the 
     receipt of an application for a credit transfer.
       ``(3) Payment of interest.--
       ``(A) In general.--Notwithstanding any other provision of 
     this title, the Secretary shall pay interest on any amount 
     which is not paid to a person during the 30-day period 
     described in paragraph (2)(B).
       ``(B) Amount of interest.--Interest under subparagraph (A) 
     shall be allowed and paid--
       ``(i) from the day after the 30-day period described in 
     paragraph (2)(B) to the date payment is made, and
       ``(ii) at the overpayment rate established under section 
     6621.
       ``(C) Exception.--This paragraph shall not apply to 
     failures to make payments as a result of any natural disaster 
     or other circumstance beyond the control of the Secretary.
       ``(4) Effect on legal rights and obligations.--Nothing in 
     this subsection shall be construed to--
       ``(A) require a lender to complete a loan transaction 
     before the credit transfer amount has been transferred to the 
     lender, or
       ``(B) prevent a lender from altering the terms of a loan 
     (including the rate, points, fees, and other costs) due to 
     changes in market conditions or other factors during the 
     period of time between the application by the taxpayer for a 
     credit transfer and the receipt by the lender of the credit 
     transfer amount.
       ``(d) Definitions and Special Rules.--For purposes of this 
     section--
       ``(1) First-time homebuyer.--
       ``(A) In general.--The term `first-time homebuyer' has the 
     same meaning as when used in section 72(t)(8)(D)(i).
       ``(B) One-time only.--If an individual is treated as a 
     first-time homebuyer with respect to any principal residence, 
     such individual may not be treated as a first-time homebuyer 
     with respect to any other principal residence.
       ``(C) Married individuals filing jointly.--In the case of 
     married individuals who file a joint return, the credit under 
     this section is allowable only if both individuals are first-
     time homebuyers.
       ``(D) Other taxpayers.--If 2 or more individuals who are 
     not married purchase a principal residence--
       ``(i) the credit under this section is allowable only if 
     each of the individuals is a first-time homebuyer, and
       ``(ii) the amount of the credit allowed under subsection 
     (a) shall be allocated among such individuals in such manner 
     as the Secretary may prescribe, except that the total amount 
     of the credits allowed to all such individuals shall not 
     exceed the amount in effect under subsection (b)(1)(A) for 
     individuals filing joint returns.
       ``(2) Principal residence.--The term `principal residence' 
     has the same meaning as when used in section 121. Except as 
     provided in regulations, an interest in a partnership, S 
     corporation, or trust which owns an interest in a residence 
     shall not be treated as an interest in a residence for 
     purposes of this paragraph.
       ``(3) Purchase.--
       ``(A) In general.--The term `purchase' means any 
     acquisition, but only if--
       ``(i) the property is not acquired from a person whose 
     relationship to the person acquiring it would result in the 
     disallowance of losses under section 267 or 707(b) (but, in 
     applying section 267 (b) and (c) for purposes of this 
     section, paragraph (4) of section 267(c) shall be treated as 
     providing that the family of an individual shall include only 
     the individual's spouse, ancestors, and lineal descendants), 
     and
       ``(ii) the basis of the property in the hands of the person 
     acquiring it is not determined--

       ``(I) in whole or in part by reference to the adjusted 
     basis of such property in the hands of the person from whom 
     acquired, or
       ``(II) under section 1014(a) (relating to property acquired 
     from a decedent).

       ``(B) Construction.--A residence which is constructed by 
     the taxpayer shall be treated as purchased by the taxpayer.
       ``(4) Purchase price.--The term `purchase price' means the 
     adjusted basis of the principal residence on the date of 
     acquisition (within the meaning of section 72(t)(8)(D)(iii)).
       ``(e) Denial of Double Benefit.--No credit shall be allowed 
     under subsection (a) for any expense for which a deduction or 
     credit is allowed under any other provision of this chapter.
       ``(f) Basis Adjustment.--For purposes of this subtitle, if 
     a credit is allowed under this section with respect to the 
     purchase of any residence, the basis of such residence shall 
     be reduced by the amount of the credit so allowed.
       ``(g) Property to Which Section Applies.--
       ``(1) In general.--The provisions of this section apply to 
     a principal residence if--
       ``(A) the taxpayer purchases the residence on or after 
     January 1, 2003, and before January 1, 2010, or
       ``(B) the taxpayer enters into, on or after January 1, 
     2003, and before January 1, 2010, a binding contract to 
     purchase the residence, and purchases and occupies the 
     residence before July 1, 2011.''.
       (b) Conforming Amendments.--
       (1) Subsection (a) of section 1016 of the Internal Revenue 
     Code of 1986 (relating to general rule for adjustments to 
     basis) is amended by striking ``and'' at the end of paragraph 
     (27), by striking the period at the end of paragraph (28) and 
     inserting ``, and'', and by adding at the end the following 
     new paragraph:
       ``(29) in the case of a residence with respect to which a 
     credit was allowed under section 36, to the extent provided 
     in section 36(f).''.
       (2) Section 1324(b)(2) of title 31, United States Code, is 
     amended by striking ``or'' before ``enacted'' and by 
     inserting before the period at the end ``, or from section 36 
     of such Code''.
       (c) Clerical Amendment.--The table of sections for subpart 
     C of part IV of subchapter A of chapter 1 of the Internal 
     Revenue Code of 1986 is amended by striking the item relating 
     to section 36 and inserting the following new items:

``Sec. 36. Purchase of principal residence by first-time homebuyer.''.
``Sec. 37. Overpayments of tax.''.

       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2002.
                                 ______