Bill Overview
Title: Affordable Housing Bond Enhancement Act
Description: This bill modifies the Mortgage Revenue Bond (MRB) and the Mortgage Credit Certificate (MCC) programs of state housing finance agencies to expand the supply of affordable homes and homeownership for low- and moderate-income homebuyers. The bill requires the Internal Revenue Service to annually report to the congressional banking and tax committees on the use by states of their private activity bond authority for housing investment. It also increases the MRB home improvement loan limit from $15,000 to $50,000. The bill permits states to redesignate their carryforward authority and use it for housing investment and permits MRBs to be used to refinance home loans for borrowers who have incomes below 115% of median family income. The bill modifies the recapture requirement for homeowners who receive a MRB-financed mortgage or an MCC and sell their residences within the first nine years of ownership and reduces the time in which a recapture tax may be assessed from nine to five years. The bill revises the MCC benefit calculation to a simple percentage of the original loan balance. It also extends the MCC revocation period from two to four years. The bill reduces the public notice requirement for MCC issuers from 90 days to 30 days and eliminates certain MCC reporting requirements.
Sponsors: Rep. Moore, Gwen [D-WI-4]
Target Audience
Population: Low- and moderate-income homebuyers
Estimated Size: 40000000
- The bill targets low- and moderate-income homebuyers by expanding the supply of affordable homes.
- Mortgage Revenue Bonds (MRBs) are often used to help low- and moderate-income individuals afford housing through lower rates or assistance programs.
- Mortgage Credit Certificates (MCCs) offer tax credits to help make homeownership more affordable, again focusing on low- and moderate-income populations.
- The increase in the MRB home improvement loan limit enables more substantial renovations, likely benefiting homeowners needing upgrades but unable to afford them without financial assistance.
- Allowing states to use carryforward authority for housing investment boosts state capacity to support affordable housing initiatives.
- Permitting MRBs to refinance loans with income limitations targets assistance to a more economically challenged demographic, potentially with unstable or lower earnings.
Reasoning
- The policy aims to enhance affordable housing options for low- and moderate-income households, a significant demographic in the US.
- The modifications to MRBs and MCCs are expected to reduce financial burdens and improve wellbeing through increased homeownership capabilities.
- Given the financial constraints, the policy may have limited coverage initially but could expand influence over time if executed efficiently by state housing agencies.
- The presence of the IRS increases accountability and ensures the broader federal impact across the US, potentially covering a large geographic area.
- Initial impacts may be felt more significantly in areas with high demand for affordable housing, such as urban centers or regions with lower income averages.
Simulated Interviews
school teacher (Austin, TX)
Age: 28 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 10/20
Statement of Opinion:
- Home prices are so high; it feels impossible to think of buying a house here.
- If this program can help reduce the costs or improve my financing options, it would be a blessing.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 8 | 6 |
| Year 20 | 8 | 6 |
construction worker (Detroit, MI)
Age: 35 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 20.0 years
Commonness: 8/20
Statement of Opinion:
- I have always wanted to own a home, but the down payment seems insurmountable.
- If I can get assistance through low-interest loans or tax credits, I might finally have a chance.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 6 | 4 |
| Year 3 | 7 | 4 |
| Year 5 | 8 | 4 |
| Year 10 | 8 | 5 |
| Year 20 | 9 | 5 |
freelance graphic designer (Los Angeles, CA)
Age: 41 | Gender: female
Wellbeing Before Policy: 3
Duration of Impact: 20.0 years
Commonness: 5/20
Statement of Opinion:
- Evictions are a constant threat, so any assistance in potentially purchasing a home could secure my family’s future.
- The new policy evaluations on MRBs and MCCs might offer relief through refinancing options.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 3 |
| Year 2 | 6 | 3 |
| Year 3 | 7 | 3 |
| Year 5 | 8 | 3 |
| Year 10 | 8 | 4 |
| Year 20 | 9 | 4 |
retired farmer (Rural Kansas)
Age: 60 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 3/20
Statement of Opinion:
- I'm worried about the maintenance costs of keeping my house liveable.
- If the MRB improvement loan could be accessible for rural areas, it might help significantly.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
software engineer (San Francisco, CA)
Age: 30 | Gender: other
Wellbeing Before Policy: 7
Duration of Impact: 0.0 years
Commonness: 15/20
Statement of Opinion:
- This policy seems like it's aimed more at those who are currently struggling financially.
- I'm glad housing issues are being addressed broadly, though it doesn't impact me directly.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
nurse (New York, NY)
Age: 45 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 7/20
Statement of Opinion:
- Having the opportunity to switch from renting to owning with some government aid could be life-changing.
- The MCC seems particularly useful for my tax situation.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 8 | 5 |
| Year 5 | 8 | 6 |
| Year 10 | 9 | 6 |
| Year 20 | 9 | 6 |
shop owner (Orlando, FL)
Age: 52 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 15.0 years
Commonness: 4/20
Statement of Opinion:
- If refinancing options truly ease up, it could save my home from foreclosure.
- The reduced public notice requirement is good; simpler processes favor people like us.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 6 | 4 |
| Year 3 | 7 | 4 |
| Year 5 | 8 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 8 | 5 |
part-time waitress, student (Chicago, IL)
Age: 25 | Gender: female
Wellbeing Before Policy: 3
Duration of Impact: 15.0 years
Commonness: 12/20
Statement of Opinion:
- The thought of owning property seems distant, but increased MRB limits could make it conceivable.
- I hope this program actually benefits individuals like me instead of getting tied up in bureaucracy.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 3 |
| Year 2 | 5 | 3 |
| Year 3 | 6 | 4 |
| Year 5 | 7 | 4 |
| Year 10 | 8 | 5 |
| Year 20 | 8 | 5 |
firefighter (Phoenix, AZ)
Age: 37 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 20.0 years
Commonness: 6/20
Statement of Opinion:
- Changes to the recapture rule seem aimed at helping someone in my situation.
- Understanding the MCC benefits more clearly could relieve my finance anxieties.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 9 | 6 |
retired (Portland, OR)
Age: 65 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 4/20
Statement of Opinion:
- I am worried about the maintenance on my old house, these loans could be helpful.
- The bill's provisions might encourage me to refinance for a better rate.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Cost Estimates
Year 1: $300000000 (Low: $250000000, High: $400000000)
Year 2: $320000000 (Low: $270000000, High: $420000000)
Year 3: $340000000 (Low: $290000000, High: $450000000)
Year 5: $380000000 (Low: $330000000, High: $500000000)
Year 10: $450000000 (Low: $390000000, High: $600000000)
Year 100: $600000000 (Low: $500000000, High: $700000000)
Key Considerations
- The bill supports increased access to affordable housing for low- and moderate-income families, potentially reducing housing instability and increasing homeownership rates.
- Modifications to MRBs and MCCs aim to make home buying more accessible, particularly in high-cost housing markets.
- Potential long-term economic benefits include increased property value, revitalization of neighborhoods, and consumer spending growth from new homeowners.