Senators Move on Housing Relief

Wall Street Journal (04/03/08) P. A3; Lueck, Sarah
Several key senators this week came to terms on a $15 billion bipartisan plan aimed at bolstering the struggling housing market. To get the package up for debate in front of the full Senate, Democrats dropped a bankruptcy provision opposed by Republicans and agreed to halve funds for counseling at-risk homeowners to $100 million. For their part, GOP lawmakers agreed to a smaller tax credit for homeowners than they initially sought and accepted $4 billion in block grants for communities to buy and refurbish foreclosed homes. The plan would not only increase the size of loans backed by the Federal Housing Administration to $550,000, it also would raise the downpayment requirement to 3.5 percent from 3 percent. Additionally, the legislation includes $10 billion of mortgage-revenue bonds that states can issue for refinancing and for first-time home buyers, a $6 billion tax break for builders and a provision to allow the nearly 28 million homeowners who do not itemize their taxes to get a deduction on their property taxes.