Good afternoon —
What's the best way to help first-time homebuyers? That's a question that legislators, affordable housing advocates and those in the industry have been wrestling with all year. Today we reported on a new bill in the Senate — the DASH Act — that once again tackles the issue.
This is another iteration of the $15,000 tax credit bill introduced in the House in April, but this one allows borrowers to use up to 20% of the purchase price, whereas the House's version allows up to just 10%. Everyone thinks that's a good idea, but the whole idea of a tax credit applied at closing is a thornier issue.
"The concern is how you actually apply the tax credit to the closing, in terms of how you make it part of the down payment," David Dworkin, president and CEO of the National Housing Conference, said in an interview with HousingWire. "Without a mechanism to do that, it only helps people who can already afford to buy a house and enables them to pay more for that house."
Dworkin said that last year his colleagues "spent a lot of time trying to figure out how to bring the value of the credit to the closing table, and frankly, we couldn't do it."
That has been the criticism we have heard for the entire year from people who had experience with earlier tax credit programs, which were true tax credits. Providing cash at the closing table seems like another order of magnitude harder, especially if the IRS is involved.
As one fair housing advocate said: "I'm not sure that they have the infrastructure to do this, and I question, with the best of intentions, the IRS being able to pull that off."
I don't think there is any question at all — the IRS as it is now constituted absolutely can't pull this off. As the Washington Post reported in June, "During the 2021 filing season, the IRS received 167 million telephone calls — over four times the number during the 2019 filing season, Collins wrote. At one point, the IRS received calls at the rate of about 1,500 per second." How many of those phone calls were answered? For their most-called number, it was about 3%.
If you think closing is complicated now, imagine waiting on someone at the IRS to pick up the phone! Or read their mail, or respond in any way. I think this bill needs serious reworking.
Until tomorrow —
Sarah Wheeler
HousingWire Editor in Chief
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