The first is the prospect of implementation of the NHTF with a new director at the Federal Housing Finance Agency. Mel Watt will be sworn in on January 6. NLIHC and numerous others are urging him to lift the suspension on the funding of the NHTF and the Capital Magnet Fund by Fannie Mae and Freddie Mac that was imposed at the outset of the financial crisis of 2008. Also, NLIHC understands that HUD is moving to finalize the NHTF regulations.
The second track is to assure that the NHTF is protected and well-funded in any housing finance reform legislation that moves this year. The Senate Committee on Banking, Housing, and Urban Affairs completed its series of hearings on housing finance reform in 2013. The Committee is now drafting comprehensive reform legislation that is expected to be similar to reform legislation introduced by Senators Bob Corker (R-TN) and Mark Warner (D-MN.) The NHTF was included in the Corker-Warner bill. In Committee hearings, Senators from both sides of the aisle indicated that the NHTF will likely be included in future legislation that advances through the Committee and the full Senate. The major question is what level of funding will be provided.
In 2013, the House Committee on Financial Services approved the Protecting American Taxpayers and Homeowners Act (see Memo, 7/12/13), legislation that would privatize the government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac and eliminate the NHTF. There is no indication to date that there is adequate support for the measure to be approved by the full House of Representatives. Alternative bills are being developed by several Members of the House and NLIHC is working to make sure that the NHTF is included in them.
The third track is the pursuit of major funding for the NHTF through federal tax reform. Modifications to the mortgage tax deduction (MID) are the basis of the United for Homes campaign to fund the NHTF and H.R. 1213, the Common Sense Housing Investment Act that was introduced by Representative Keith Ellison (D-MN).
Prospects for tax reform in the 113th Congress are uncertain. Senate Committee on Finance Chair Max Baucus (D-MT) has been nominated to be the ambassador to China. If he is confirmed, as is expected, Senator Ron Wyden (D-OR) will likely be the new chair of the Committee. While the Committee has done a great deal of work on tax reform, no documents that relate to MID reform have emerged.
No draft legislation related to MID has been circulated by the House Committee on Ways and Means to date. Chair Dave Camp (R-MI) is said to have completed a comprehensive tax reform bill, but has held it back at the urging of House leaders. If a markup does occur, it is highly unlikely that any reform legislation coming out of Ways and Means Committee will be bipartisan.