This week, the U.S. House of Representatives’ Transportation and Infrastructure Committee will begin to consider legislation that will fund transportation programs, such as repairing and expanding highways. In order to fund these programmatic extensions, the House is considering drawing funds from the guarantee fees charged by Fannie Mae and Freddie Mac.
Guarantee fees or “G-fees” cover Fannie Mae and Freddie Mac in the case of faulty loans and help them to mitigate credit risk. Previous legislation mandated that G-fees would be decreased over a period of four years. Proposed legislation would delay this adjustment, freeing up $1.9 billion.
The over one million members of The National Association of Realtors (NAR) are taking action to oppose this proposal.
Bad timing, some markets still recovering
According to Chris Polychron, president of NAR, this proposal “effectively taxes potential homebuyers and consumers looking to refinance their mortgages.” The change is likely to disproportionately affect first time home buyers and people with low or moderate incomes.
With the housing market still in a fragile state, now is not the time to make it more expensive and challenging for consumers to purchase or refinance a home
Experts at NAR say that the “housing sector is still recovering, with some market segments remaining in a delicate state. An increase in G-fees would disturb the housing recovery at it would raise the cost to purchase or refinance a home.”
NAR urging parties to contact representatives
While NAR understands the importance of funding transportation to improve neighborhoods and metro areas, taxing folks working hard to purchase or refinance a home is not the way to fund our highways. NAR is encouraging realtors, home owners, and other concerned parties to contact their representatives and senators and let them know that you oppose this legislative proposal. You can read NAR’s Call to Action and fill out a form letter to your legislator on NAR’s website.