Norton Says National Housing Bill Will Benefit District Residents (7/30/08)

Washington, D.C. - Congresswoman Eleanor Holmes (D-DC) is pleased that the bill H.R. 3221, "the Housing and Economic Recovery Act of 2008," that President Bush signed this morning will throw a lifeline to the government-sponsored Freddie Mac and Fannie Mae, and help 400,000 homeowners replace bad mortgages with affordable, federally financed ones. The bill also will benefit District of Columbia residents, and the National Affordable Housing Trust Fund, which provides for affordable rentals and home ownership, and is especially important to the District of Columbia. Seventy-five percent of the provisions for the Affordable Housing Trust Fund will be used for rental housing to people with incomes below 30 percent of the median income. All the funds will have to benefit people with incomes below 50 percent of the area medium.

Norton also said that although the District has been less affected by subprime lending practices than other cities of the same size, like Baltimore, District residents will also benefit from the bill's $180 million for pre-foreclosure counseling and legal services for distressed borrowers, and offer $7,500 federal tax credits to home buyers, in a provision that closely models Norton's $5,000 D.C. homebuyer tax credits.

Norton said that her $5,000 tax credit has helped the District retain homeowners and served as a model for the $7,500 tax credit in the national bill. Unlike Norton's tax credit, however, the federal tax credit is only a stop gap measure to prop up the declining housing market that will expire in a short time and will have to be repaid, with the interest forgiven only for 15 years. Norton's tax credit to District residents does not have to be re-paid and does not count against the homeowner's equity.