Jul 28 2008 -
Broad Housing Assistance Measure Also Includes Important GO Zone Provision
A breakthrough last week in negotiations on major housing assistance legislation should help provide stability to the housing market, and that is good news for Mississippians and people across our country. After President Bush dropped his opposition to the bill early last week, the House of Representatives quickly passed the measure. As this column was being written, the Senate was poised to approve the bill, which was the product of months of bipartisan compromise.
While not perfect, this broad legislation will offer needed assistance for those fighting to hold on to their homes while also providing an extension of GO Zone tax benefits critical to rebuilding efforts in South Mississippi.
QUICK ACTION NEEDED
Statistics provided by the Mortgage Bankers Association show an alarming number of American homeowners are in danger of foreclosure. In June, the delinquency rate for mortgage loans on residential properties across the country was 6.3 percent. In Mississippi, that number was even higher at 9.4 percent. Coupled with the negative effect high gas prices are having on our country, quick action was needed to ensure the soundness of our housing and financial markets, as well as the overall health of our economy.
To address our country’s housing problems, the legislation includes a program to help borrowers refinance unaffordable subprime loans and provides additional funding for counseling to help troubled homeowners avoid foreclosure. In order to help improve property values across the board, the bill contains $15 billion in tax credits for new homeowners, including a first-time homebuyer’s credit worth 10 percent of the home’s purchase price up to $7,500. The legislation also provides a much-needed regulatory overhaul of Fannie Mae and Freddie Mac, the government-sponsored mortgage companies, while also providing them new emergency financing in order to help restore market confidence.
GO ZONE EXTENSION
Of particular significance to our state, the legislation contains a provision I authored, with the support of Sen. Cochran, that will extend an important GO Zone tax provision to help spur rebuilding efforts in the five counties in Southern Mississippi hardest hit by Katrina: Pearl River, Stone, Hancock, Harrison and Jackson. Current law states that in order to take advantage of the GO Zone bonus depreciation tax benefit, eligible construction projects must have broken ground by December 31, 2007, and be completed by December 31, 2010. My provision erases the construction start date, allowing for more construction projects in Southern Mississippi to take advantage of the intended tax benefits, further helping Gulf Coast reconstruction efforts.
This legislation represents a bipartisan achievement that was months in the making. As with any bill of this size, it is far from flawless. It will, however, provide immediate relief to families hurting from our current housing crisis and, most importantly, help our country’s economy find more solid ground. In the face of the most serious housing challenge in recent memory, this bill represents the kind of bipartisan response Americans expected.