HOUSING BONDS AND CREDITS; Congressional Record Vol. 147, No. 30
(Extensions of Remarks - March 08, 2001)

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[Extensions of Remarks]
[Pages E316-E317]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

                       HOUSING BONDS AND CREDITS


                          HON. RICHARD E. NEAL

                            of massachusetts

                    in the house of representatives

                        Thursday, March 8, 2001

  Mr. NEAL of Massachusetts. Mr. Speaker, Representative Amo Houghton 
and I are today introducing legislation to make three important changes 
to two of the most popular and efficient housing programs before 
Congress, the single family Mortgage Revenue

[[Page E317]]

Bond (MRB) program and the Low Income Housing Tax Credit program.
  First, this bill repeals the ten-year rule, a provision added to the 
MRB program in 1988 that prevents the states from fully using mortgage 
bonds by limiting the extent to which new mortgages can be made on 
outstanding bonds on which prepayments have been made by the original 
beneficiaries. States estimate that, between 1998 and 2002, the ten-
year rule means the loss of over $8.5 billion in mortgage authority, 
denying over 100,000 qualified lower and moderate income home buyers 
affordable MRB mortgages.
  Second, the bill replaces the present limit on the price of homes 
these mortgages can finance with one that works better given the fact 
that there is no reliable comprehensive data that exists to determine 
average area home prices. The current price limits were issued in 1994 
based on 1993 data. They are, obviously, obsolete and well below 
current home price levels in most parts of the country. We propose a 
simpler formula limiting the purchase price to three and a half times 
the qualifying income under the program. This will work to preserve the 
goals of current law while providing a realistic limit on the program 
for almost all areas of the nation.
  Finally, the bill makes housing credit apartment production more 
viable in rural areas by allowing statewide medium incomes as the basis 
for the income limits in that program. While this provision may need 
some technical adjustment, it is clear that the current rules do not 
provide sufficient incentives to build apartments in very low income 
rural areas.
  Mr. Houghton and I believe these changes, when combined with the 
increase in the caps on these programs enacted last year, will ensure a 
strong, effective housing program that will meet the needs of our 
constituents now, and well into the future. We hope these changes will 
be adopted in the near future.