Builders Urge Congress to Renew Home Buyer Tax Credit to Create Jobs, Boost Economy

WASHINGTON--(Business Wire)--
In order to create hundreds of thousands of badly needed jobs and move the
economy to higher ground, the National Association of Home Builders (NAHB) today
called on Congress to extend and expand the $8,000 first-time home buyer tax
credit set to expire at the end of next month.

Testifying before the Senate Banking Committee, NAHB Chief Economist David Crowe
warned that builders are reporting that business generated by entry-level buyers
is already declining because it is now too late to complete a new home sale in
time to take advantage of the tax credit.

"Not only will builders soon be losing one of their most effective selling tools
when the $8,000 federal housing tax credit expires on Nov. 30, they are also
facing significant challenges that threaten to derail the fragile housing
recovery before it even has time to take root," said Crowe. "Strict mortgage
underwriting and low appraisals are making it difficult for a willing buyer to
complete the sale, and terms and credit availability for builder acquisition,
development and construction (AD&C) loans are extremely tight. The bottom line
is that housing and the economy are at a critical crossroads."

To spur job growth, help reduce foreclosures and excess housing inventories and
stabilize home values, NAHB is calling on Congress to extend the home buyer tax
credit for an additional year through Nov. 30, 2010 and make it available to all
purchasers of a principal residence.

"We estimate this would increase home purchases by 383,000 and create nearly
350,000 jobs in the coming year," said Crowe, adding that it would also generate
$16.1 billion in wages and salaries; $12.1 billion in business income and tax
income of $11.6 billion for federal, state and local governments.

Congress can also help put the housing market back to work by encouraging
regulators and the banking industry to restore lending for viable home building
projects and to take meaningful steps to avoid unnecessary foreclosures on
outstanding AD&C loans by accommodating loan modifications and workouts.

"This would provide relief for a major sector of the economy that has suffered
because of regulatory excess and the inability of banks to provide the necessary
funding and flexibility that would otherwise keep loans performing as
scheduled," said Crowe.

To further contribute to a housing and economic recovery, Crowe urged Congress
to call on the Federal Housing Administration, Fannie Mae and Freddie Mac to
adopt new regulatory guidelines for conducting appraisals under distressed
market conditions.

Citing a recent survey by NAHB that found that 25 percent of builders are losing
sales because their appraisals are coming in below the contract price, Crowe
said: "You just cannot compare a well-constructed new home with a foreclosed
home that has been vacant for months and was probably neglected for a long time
before it was vacated. They simply are not comparable, and the standards need to
be adjusted to reflect that reality."

ABOUT NAHB: The National Association of Home Builders is a Washington,
D.C.-based trade association representing more than 200,000 members involved in
home building, remodeling, multifamily construction, property management,
subcontracting, design, housing finance, building product manufacturing and
other aspects of residential and light commercial construction. Known as "the
voice of the housing industry," NAHB is affiliated with more than 800 state and
local home builders associations around the country. NAHB's builder members will
construct about 80 percent of the new housing units projected for 2009.

NAHB
Donna Reichle, 202-266-8473
dreichle@nahb.com
www.nahb.org

Copyright Business Wire 2009