HUD Secretary Shaun Donovan put to rest today rumors that HUD would renege on its previously announced plan to allow first time-home buyers to apply the current $8,000 tax credit toward the purchase of a new home at settlement. Speaking before a standing-room-only audience at the NAHB’s spring board meeting in Washington, D.C., Donovan announced that, effective immediately, first-time home buyers using FHA-approved lenders would be able to put their tax credit toward closing costs or use it to boost their downpayment to an amount above the FHA-required 3.5%.
Addressing home builders unhappy with the Obama administration and Congress for excluding them from stimulus or recovery programs so far, Donovan sought to assure the audience that HUD would like to “partner with you.” He added that the White House knew that “the U.S. economic downturn began with the downturn in the housing market and recovery has to begin in the housing market, as well.”
A housing recovery, Donovan continued, would generate thousands of jobs in the United States, help advance the administration’s policies on energy efficiency, and would simply be “a smart investment.”
The first step, he said, would be to enhance the usefulness of the $8,000 tax credit by letting buyers access the money immediately rather than having to wait to receive the credit at tax time. This action, Donovan said, “will assist home buyers at closing, but it will particularly benefit home builders across the country.”
In addition, he said, the administration has included billions of dollars in its 2010 budget for housing. Line items include:
An FHA modernization plan, starting with a comprehensive review of systems, technology investments, and increased staffing.
Funding for the expansion of homeownership opportunities by providing housing counseling for prospective buyers and programs to combat mortgage fraud and predatory lending practices.
Investments in energy innovations, sustainable communities, and increased connections between housing and transportation.
“National housing policy can’t be just about single-family housing,” Donovan asserted. “Multifamily housing and rentals are also very important.” The secretary, who throughout his career has focused on ambitious goals of providing low- and moderate-income housing, closed his presentation by saying that the American Dream should include “a decent, safe home for every American family.”
Denise Dersin is the editor in chief of BUILDER magazine.
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