Federal Housing Stimulus Bill Needs Action

The need for federal legislation to spur home buying and hold back the foreclosure wave is increasing day by day. Congress went home for the Independence Day recess without reaching agreement on key aspects of the housing bill, although there’s a good chance that a bill will be sent to President Bush by the August recess.

The centerpiece of the prospective housing bill is a temporary $8,000 tax credit for first-time home buyers, a provision that could jump-start home sales, help to stabilize house prices and mortgage credit quality and take some pressure off the AD&C loan markets as well.

Other key provisions would limit mortgage foreclosures and strengthen the government-related components of the mortgage finance system in both the short and long term.