A much-anticipated stimulus plan inched closer to President Barack Obama’s desk this week after the Senate passed an $838 billion economic recovery bill Tuesday. Senators voted 61 to 37 for the massive bill.
The package now heads to a House-Senate conference to be resolved with differences in an $820 billion version passed by the House.
Affordable housing industry members had been urging their U.S. senators to include proposals for the low-income housing tax credit (LIHTC) program in the hotly debated stimulus.
A plan for the LIHTC program has become a priority for the industry as the market struggles with a drop in private-sector investments. Industry members are still being encouraged to call their senators and representatives to urge them to include a LIHTC plan and other housing proposals in a final version.
The Senate version includes a provision that would accelerate the tax credit to allow investors to claim 20 percent of the allowable credits in each of the first three years.
This proposal was introduced by Sen. Maria Cantwell (D-Wash.), who said her amendment would help to stabilize the LIHTC program by attracting new private investors.
The Senate bill also authorizes an additional $1.5 billion for 2008 and another $1.5 billion for the 2009 New Markets Tax Credit rounds. The credits for the 2009 round would be allowed against the alternative minimum tax.
However, the massive Senate bill fails to include funding to expand the Neighborhood Stabilization Program, which is a big concern for many in the industry.
On Tuesday, Treasury Secretary Timothy Geithner also discussed a “financial stability plan” and said the administration will launch a comprehensive housing plan. Plan details will be released in the next few weeks, but it is expected to include a proposal to drive down mortgage rates, a $50 billion commitment to prevent foreclosures, and a strategy to build flexibility into HOPE for Homeowners and the Federal Housing Administration to enable loan modifications for some distressed borrowers.