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Real Estate Information

NAHB: Earth Day Tips

by on April 22, 2008

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WASHINGTON, April 21 - As Earth Day approaches, the National Association of Home Builders (NAHB) encourages home owners everywhere to take simple steps to reduce energy use - and to think green when they buy a new home.

“We are all proud of the significant steps our members have taken to make new homes more energy efficient,” said NAHB President Sandy Dunn, a West Virginia home builder. “More than 100,000 green homes have been built by our members in home builder association programs around the country. We’re moving the market - in a voluntary, cost-effective way.”

Per square foot, new homes consume less than two-thirds the energy of older homes for heating and air conditioning, according to federal utility use audits and research by NAHB economists. “Americans who have bought a new home recently should all take a big bow on Earth Day,” Dunn said.  “Today’s energy-efficient homes leave a lighter footprint  — and that’s something new homeowners can be very pleased about.”

Energy efficiency is an important driver in the green building movement and usually accounts for about half the costs of making a traditional home a green home, NAHB studies show. In the new NAHB National Green Building Program, homes must be 15 percent more energy efficient than required by the prevailing building code to meet the Bronze level of certification.

Consumers can choose a builder or remodeler who participates in the NAHB National Green Building Program and local home builders association programs or who is a Certified Green Professional[tm] when they are ready to buy a new green home or renovate their existing home.

“As many advances as we’ve made, NAHB recognizes that new energy-efficient homes are only part of the solution. We need to be better energy stewards in the homes we have now. That’s the most efficient way to make a noticeable impact on the amount of power we use,” Dunn said.

Dunn also suggested three simple measures that can make a noticeable difference for a home owner’s bottom line:

Switch out some light bulbs.  The U.S. EPA estimates that if every home replaced its five most frequently used traditional light bulbs and fixtures with ones bearing the Energy Star label, the U.S. would save about $8 billion in energy costs and the greenhouse gas equivalent of emissions from 10 million cars.

Change the air filter in your heating and air conditioning system.  The EPA recommends changing the filter at least every three months and more if it looks dirty. A dirty filter slows down air flow, making the system work harder and use more energy.

Seal and insulate. Home owners can typically save up to 20 percent of heating and cooling costs by air sealing their homes and adding insulation in attics, floors over crawl spaces, and accessible basement rim joists.

“As national leaders in the green building movement it’s important for NAHB to remind our customers - American home owners - to be energy conscious. We all must do our part,” Dunn said.

NAHB Applauds Congress Action to Eliminate Taxes on Mortgage Debt

by on December 18, 2007

WASHINGTON, Dec. 18 - The National Association of Home Builders (NAHB) today applauded Congress for passing legislation to eliminate taxes on mortgage debt, noting that it will help struggling home owners to avoid foreclosure.

“This bill helps to address the subprime lending crisis by preventing strapped home owners from taking a significant tax hit to restructure their mortgages and allowing them to stay in their homes,” said NAHB President Brian Catalde, a home builder from El Segundo, Calif.

The legislation, which is expected to be signed into law by President Bush, will provide a temporary, three-year change to the tax code to eliminate any taxes home owners might face when banks renegotiate the terms of a home loan and forgive a portion of the outstanding mortgage debt. The change in the tax law will cap untaxable forgiven debt at $2 million and apply only to principal residences.

Existing tax rules under Section 108 of the Internal Revenue Code impel many struggling home owners to seek foreclosure over restructuring their loan with lenders because forgiven mortgage debt is taxed as ordinary income.

H.R. 3648, the Mortgage Forgiveness Debt Relief Act, removes this tax burden on mortgage indebtedness, encourages market-based restructuring between lenders and home owners and discourages foreclosures, said Catalde.

For example, to keep a struggling borrower with a generally solid credit history from losing their home, a bank could elect to cut its loan rate 20 percent - from $250,000 to $200,000. While substantial, the $50,000 reduction would still be considerably less than the 30-to-50 percent loss that would be likely if the home were repossessed. The outcome, obviously, would be better for the home owner, who otherwise would lose the property.

Under current tax law, that forgiven $50,000 in forgiven mortgage debt is considered taxable income. That’s a deal-killer for the home owner who is already struggling just to stay afloat.

“For families already struggling to make ends meet, the phantom income and resulting tax burden generated by Section 108 can endanger their financial health even further,” said Catalde. “That’s why it was so important for Congress to act.”

The legislation also includes an NAHB-supported provision that extends the deductibility of mortgage insurance for three more years. “By enabling mortgage insurance premium payments to be deducted, homeownership is made more affordable for thousands of families who now will be able to buy a home without having to resort to more costly subprime or predatory alternatives,” said Catalde.

To further address the housing crisis, Catalde called on the House and Senate to move quickly to reconcile pending FHA reform legislation and urged the Senate to pass legislation to reform Fannie Mae and Freddie Mac and allow them to purchase mortgages in high-cost markets.

“These three pieces of legislation - mortgage debt forgiveness, FHA modernization and GSE reform — are critical to help the housing and credit markets to stabilize and recover and to keep the economy moving forward,” said Catalde.

Senate Agrees to Cap Taxes on Forgiven Mortgage Debt

by on December 17, 2007

WASHINGTON, Dec. 17 - In a move to address the subprime lending crisis and to help struggling home loan borrowers, the Senate on Dec. 14 approved legislation that would eliminate any taxes home owners might face when banks renegotiate the terms of a home loan and forgive a portion of the outstanding mortgage debt. The change in the tax law would cap untaxable forgiven mortgage debt at $2 million and apply only to principal residences.

“This legislation will play a central role in helping American families avoid foreclosure and stay in their homes,” said Brian Catalde, president of the National Association of Home Builders (NAHB) and a home builder from El Segundo, Calif.

Existing tax rules under Section 108 of the Internal Revenue Code impel many struggling home owners to seek foreclosure over restructuring their loan with lenders because forgiven mortgage debt is taxed as ordinary income.

S. 1394, the Mortgage Cancellation Relief Act of 2007, would remove this tax burden on mortgage indebtedness, encourage market-based restructuring between lenders and home owners and discourage foreclosures, said Catalde.

Sponsored by Sens. Debbie Stabenow (D-Mich.) and George Voinovich (R-Ohio), the bill would provide a temporary, three-year change to the tax code to eliminate taxes on forgiven mortgage debt.

For example, to keep a struggling borrower with a generally solid credit history from losing their home, a bank could elect to reduce the amount of the loan by 20 percent - from $250,000 to $200,000. While substantial, the $50,000 reduction would still be considerably less than the 30-to-50 percent loss that would be likely if the home were repossessed. The outcome, obviously, would be better for the home owner, who otherwise would lose the property.

Under current tax law, the $50,000 in forgiven mortgage debt is considered taxable income. That’s a deal-killer for the home owner who is already fighting just to stay afloat.
“That’s why we need to change the law,” said Catalde.

S. 1394 also includes an NAHB-supported provision that extends the deductibility of mortgage insurance for three more years. Mortgage insurance is especially critical for low- and moderate-income first-time home buyers, many of whom may not qualify for a market-rate mortgage.

Catalde also urged the Senate to continue to address the housing crisis by quickly reconciling its FHA reform legislation, S. 2338, which passed last week, with its House-passed counterpart, H.R. 1852, and passing legislation to reform Fannie Mae and Freddie Mac and allow them to purchase mortgages in high-cost markets.

“These three pieces of legislation are critical to help the housing and credit markets to stabilize and recover,” said Catalde. “We are hopeful that the House will take up and pass the Senate debt forgiveness bill and send it to the President this week before the Congress adjourns for the holidays.”

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