Kim Clark, AE, GAD
Housing Aid Bill Clears Key Senate Hurdle
June 25, 2008 – A bill aimed at helping hundreds of thousands of homeowners in danger of foreclosure cleared an important test vote in the Senate on Tuesday, raising the prospects for final passage of an aid bill by mid-summer. The Senate voted 83-9 to speed up work on the $300 billion mortgage aid plan. The vote reflects a keen interest in both parties in claiming election-year credit for helping homeowners amid tough economic times. The measure faces a veto threat from President Bush, however, it has been reported that lawmakers are willing to make changes to get the bill signed by the President. Differences between the Senate and the House, which approved a somewhat different housing-rescue bill by 266 to 154 last month, will have to be ironed out. Those challenges will probably delay any final deal until mid-July. The centerpiece of the package is a foreclosure rescue program in which the Federal Housing Administration would provide $300 billion in new, cheaper mortgages for distressed homeowners who otherwise would be considered too financially risky to qualify for government-insured, fixed-rate loans. The bill would create an affordable housing fund, financed by Fannie Mae and Freddie Mac, the government-sponsored financial institutions that purchase mortgages from lenders. In the first year after final approval of the legislation, the fund would provide about $500 million for the foreclosure-rescue campaign. It also would provide a $14.5 billion array of tax breaks, including a credit of up to $8,000 for first-time homebuyers who buy a home in the next year and boosts in low-income tax credits and mortgage revenue bonds.