Growing demand for affordable housing throughout the U.S. has inspired the National Association of REALTORS®, (NAR), to come forward as an advocate for some innovative legislation predicted to expand opportunities for home ownership.
The “Housing Opportunity Through Modernization Act,” or H.R. 3700, improves the Federal Housing Administration’s, (FHA), lending processes for condominiums.
Thanks in part to the heavy advocacy efforts REALTORS® deployed to both members and consumers, this much needed legislation has been passed by the House and now the Senate, and is on its way to the president's desk.
NAR strongly believes H.R. 3700 will effectively put homeownership within reach for more families. The legislation provides significant benefits to assist home buyers and as a result, the overall real estate market by:
“Current FHA condo lending rules restrict the number of condos available to FHA home buyers, thus limiting the often most affordable, appropriate choice for many families,” NAR states in a release about the bill. “Changes to the processing of rural housing loans will improve access for deserving families, and reforms to federally assisted housing programs will ease burdens for landlords and improve access for residents.”
Owning a home yields benefits such as putting down roots and becoming active and contributing members of the community. But home affordability in Colorado continues to decline, partly due to high rental prices hindering the ability to save for a down payment.
The First-time Homebuyer Savings Act Tax Deduction, (FHSA), is an opportunity to mitigate that savings gap. New legislation backed by The Colorado Association of REALTORS®, (CAR), FHSA was recently signed into law by Colorado Governor John Hickenlooper, and the bill has earned nationwide attention as Congressman Mike Coffman has introduced a federal version of the bill.
These first-time homebuyer savings accounts allow any Coloradan to set aside up to $50,000 toward the costs of purchasing a new home, and will allow tax deductions for account holders on the interest earned on these accounts. The earnings on those funds— interest and capital gains — are free from Colorado state taxes forever.
“Home affordability in Colorado and many other states has been declining recently as real estate prices rise at a faster rate than income,” The 2016 Colorado Association of REALTORS® Chairman Alan Lovitt said. “We believe that savings accounts that help buyers put money away for a down payment, closing costs and other expenses associated with buying your first home are a great step toward solving this problem.”
Almost any financial institution account, including brokerage accounts, can serve as a FHSA, and they are simple and easy to set up. Not only can you open a new one, you can also transfer money from an existing savings account to an FHSA.
“Despite all of the positive conditions and elements of homeownership across the country, affordability for first time homeowners continues to be a significant barrier for too many states’ residents,” Lovitt said. “This bill would help provide a very important financial savings resource for many people to achieve their dream of homeownership. We applaud and support Congressman Coffman’s efforts to address this vital issue.”
In a letter to Congressman Coffman, the National Association of REALTORS® weighed in with their support for the federal legislation, stating: “On behalf of the over 1.1 million members of the National Association of REALTORS®, I applaud your efforts to develop and introduce legislation that would establish First-Time Homebuyer Accounts. NAR believes that, if enacted, these accounts could provide a significant vehicle to assist those who very much would like to join the ranks of homeowners but who have been unable to save enough for the all-important down payment.”