President Joe Biden addresses reporters on Feb. 16, 2023. Photo by Photo by Adam Schultz | White House photo/handout
Among the many proposals and pledges included in his State of the Union speech Thursday night, President Joe Biden called on Congress to pass a package of tax credits and other funding measures to help address the nation’s housing shortage.
“I know the cost of housing is so important to you. If inflation keeps coming down mortgage rates will come down as well. But I’m not waiting,” he said.
The plan, outlined in a fact sheet released by the White House in the hours before Biden’s speech, would both try to produce more housing and give financial help to individual consumers in the housing market.
First, the plan calls for a $5,000, two-year tax credit for first-time homebuyers to use in buying down points on their mortgages, and a one-year, $10,000 tax credit to people who the fact sheet called “middle-class families” who sell a starter home, defined as one that sells below the median home price in their county, to another owner-occupant. The two proposals together are aimed at taking a bite out of the mortgage rate lock-in effect keeping homes off the for-sale market and could help up to 3 million Americans, the White House said.
Second, the plan calls for a program to provide up to $25,000 in down payment assistance to 400,000 first-generation homebuyers.
Third, the plan calls for an expansion of the federal Low Income Housing Tax Credit program to fund 1.2 million more affordable rental units over an unspecified period of time, as well as a new Neighborhood Homes Tax Credit that would fund the construction or renovation of 400,000 affordable home ownership units.
Fourth, the White House said a $20 billion competitive grant fund will be included in Biden’s budget proposal to fund affordable multifamily rental units and starter homes across the country, as well as “incentivize local actions to remove unnecessary barriers to housing development” and “pilot innovative models to increase the production of affordable and workforce rental housing.”
Fifth, the White House said Biden will propose doubling each Federal Home Loan Bank’s annual contribution towards the Affordable Housing Program, from 10 percent of prior year net income to 20 percent, to help an additional 380,000 households.
And sixth, the fact sheet states that Biden will ask Congress to add 500,000 spots in the federal Housing Choice Voucher program.
In addition, the fact sheet said federal agencies will be pursuing various rulemaking and enforcement efforts, like targeting landlords and mortgage lenders as part of the administration’s anti-“junk fee” campaign, using the CFPB’s authority to tackle anti-competitive practices to target mortgage lenders’ closing costs and threatening to use federal agencies’ regulatory powers around unfair or deceptive business practices to rein in “inflated” rent increases in unspecified ways.
