Charles McMillan was 2009 president of the NATIONAL ASSOCIATION OF REALTORS®.
Two More Steps Forward
As I write this, the NATIONAL ASSOCIATION OF REALTORS® has just announced the third straight month of pending home sales increases. This hopeful sign doesn't mean our economy is out of the woods, but it does mean we're moving in the right direction. And your association is playing an important role.
July 1, 2009
Let me give you two recent examples of how we’ve delivered on our promise to be The Voice for Real Estate® in Washington. The first is in the arena of short sales. We’ve been actively engaged in discussions with both the lending industry and the federal government about the difficulty you’re having closing short sales—we know there’s nothing more frustrating than bringing a good offer to the table only to have the transaction delayed to the point where the buyer backs out or the home is foreclosed.
That’s why we were glad to have news from the Obama administration in May on plans to address problems in the short-sale process. Specifically, when a successful modification isn’t possible, the government is offering incentives to avoid foreclosure by encouraging a private sale through the short-sale process or assignment of the deed to the lender. The Treasury Department was still developing guidance and forms for these programs as of mid-June.
The second development is related to the first-time home buyer tax credit. In May, U.S. Department of Housing and Urban Development Secretary Shaun Donovan unveiled plans to allow consumers to apply the tax credit toward the purchase of a home. This was significant news, given the limited time the tax credit is available—sales must be closed by Nov. 30, 2009—and the difficulty many first-time buyers have coming up with a down payment.
HUD released details in early June, spelling out a couple of options for first-time buyers.
One option is for qualified buyers to obtain a bridge loan through their state or local housing finance agency or from a nonprofit housing agency. Currently 11 state HFAs have such programs established—they are Colorado, Delaware, Idaho, Kentucky, Missouri, New Jersey, New Mexico, Ohio, Pennsylvania, Tennessee, and Virginia—and more states reportedly have programs in the works.
For FHA mortgages, the other option is for the lenders to set up a personal loan that the buyers can use to cover closing costs or buy down their interest rate. Buyers must still provide a down payment of at least 3.5 percent from their own funds, though that money could be a gift from a family member, employer, or nonprofit organization.
It’s great to see such progress, but it won’t take our focus on these and other important issues, including federal disaster insurance, health care reform, and new appraisal rules. I hope you’ll work with me by supporting the REALTORS® Political Action Committee and responding to our calls for action. Working together, there’s nothing we can’t achieve.
Updated: August 11, 2022