Both the House and Senate are in recess for the next two weeks but wanted to send a quick update on a busy last week in Washington.

 

Passage of FY 2018 Spending Bill Critical Step for Affordable Housing Funding and Flood Reauthorization

U.S. House and Senate voted Thursday to fund the federal government through September 30, 2018. The 2,232-page bill contains important provisions related to housing that REALTORS® have been fighting for, including alleviating the weakening of the Low-Income Housing Tax Credit (LIHTC) from the new tax law, extending the EB5 program, extending the National Flood Insurance Program (NFIP) until July 31^st, doubling flood map funding to $263 million, up from $177 million in the previous year, and maintains funding for the flood mitigation, proofing and elevation of properties ($175 million), as well as the Office of the Flood Insurance Consumer Advocate ($5 million) to assist homeowners with concerns over flood mapping and/or insurance ratings.

 

NAR Testifies on Association Health Plans

On Tuesday, March 20th, NAR testified before the U.S. House Education and the Workforce Subcommittee on Health, Employment, Labor and Pensions in support of current regulatory efforts to expand association health plans (AHPs).  At the hearing, which focused on U.S. Department of Labor’s recently proposed AHP rule, Mike McGrew, a REALTOR® for more than 30 years in Lawrence, Kansas, and former NAR treasurer, expressed NAR’s strong support for the rule’s provisions to allow self-employed individuals with no employees to participate in association health plans. You can watch the hearing here.

 

Infrastructure Facebook Event:

On Tuesday, March 27 at 2 PM – 2:45 PM EST NAR is hosting a Facebook event titled  $1.5 Trillion Infrastructure Plan: Opportunities for You? The Trump administration has released details on its plan to leverage $200 billion in federal funds to generate $1.3 trillion in local, state, and private investment to improve infrastructure projects around the country. What needs to happen next for this plan to be enacted? Should it be enacted, in its entirety or in part, what will be the impact on your local economy, real estate values, and land use planning? And what opportunities will there be for you? NAR analysts will share their insight into how the plan could unfold in the years ahead.

 

2018 Flood Insurance Rates

On April 1, 2018, National Flood Insurance Program (NFIP) premium rates are set to rise an average of 8%. This increase is slightly more than last year but consistent with the annual 5-10% increases prior to the 2012 Biggert-Waters Act, which made significant reforms to the NFIP. Under 2014 Flood Insurance Affordability amendments, individual property owners could see a rate increase up to 18% for newer properties and 25% for older ones. With these April 1 changes, FEMA is also continuing to implement the next round of increases and other technical changes for the newly mapped and preferred risk properties.

 

Fed Raises Rates: What This Means for Mortgages

The Federal Reserve voted Wednesday to raise its short-term interest rates, and that likely will mean more mortgage rate increases are on the horizon. The Fed’s rates are not directly tied to mortgage rates but tend to follow 10-year Treasury bonds. However, mortgage rates are often influenced by the Fed’s rates.  Following the Fed’s move, buyers will need to brace for further hikes, cautions Danielle Hale, realtor.com®’s chief economist. “While they may find some days or weeks and maybe even a month or two where mortgage rates trend lower, the general direction in the months ahead is up,”

 

Proposed USDA Ineligible Area Maps

The U.S. Department of Agriculture (USDA) made available the proposed newly ineligible area maps for Rural Development Single Family Housing and Multi-Family Housing programs, including Section 502 rural housing loans. The “Proposed Ineligible Areas” maps show all ineligible non-rural areas, and not only the new non-rural areas.  In some cases, previously ineligible areas will now become eligible rural areas. The new ineligible areas will become effective on June 4, 2018

 

Anti-Money Laundering Event

Last week, NAR participated in an all-day conference hosted by George Mason University’s Terrorism, Transnational Crime and Corruption Center on “Money Laundering in Real Estate.” NAR staff presented the industry perspective on a panel along with Nick D’ Ambrosia, a REALTOR® broker and SVP of Education and Licensing for Long & Foster Real Estate Companies. Also on the panel were representatives from the American Land Title Association and the American Escrow Association. The conference provided valuable insight in the vulnerabilities of the real estate industry as a target for money laundering schemes. As a result, many in attendance were in favor of increased regulations on the industry as a means to gain more intelligence on buyers and sellers in an attempt to crack down on illicit financing schemes. However, such regulations would prove burdensome and unnecessary given the existing anti-money laundering regulations that already apply to U.S. financial institutions

 

Geographic Targeting Orders (GTOs) Extended

The U.S. Department of Treasury’s lead agency in the fight against money laundering, the Financial Crimes Enforcement Network (FinCEN), has renewed the Geographic Targeting Orders (GTOs) imposing data collection and reporting requirements on title companies involved in certain high-end real estate transactions. FinCEN previously discovered that about 30 percent of the reported covered transactions in the GTOs were linked to possible criminal activity by the individuals revealed to be the beneficial owners of the shell company purchasers. As a result, FinCEN has extended the GTOs until September 2018 covering the following geographic areas and transactions:

$500k and above – Bexar County, Texas

$1m and above – Miami-Dade, Broward, and Palm Beach Counties, Florida

$1.5m and above – New York City Boroughs of Brooklyn, Queens, Bronx, and Staten Island

$2m and above – San Diego, Los Angeles, San Francisco, San Mateo, and Santa Clara Counties, California

$3m and above – New York City Borough of Manhattan $3m and above – City and County of Honolulu, Hawaii

The GTOs do not impose any new obligations on real estate professionals, except to the extent that a transaction is covered by a GTO and the title company needs to consult with the real estate professional to obtain information necessary to maintain compliance with the order. However, such communications should not affect the real estate sales transaction or timeline for closing as title companies are required to report GTO covered transactions to FinCEN within 30 days of the closing.

 

 

Please let me know if I can be of assistance. Hope everyone has a great week.

 

-April

 

 

April Brown Gavin

 

National Association of REALTORS®

Senior Political Representative

abrown@realtors.org

 

Happy Monday- both the House and the Senate are in this week with focus on President Trump’s Fiscal Year 2019 proposed budget. On Wednesday, the House Financial Services Subcommittee on Financial Institutions and Consumer Credit is holding a hearing on Data Security/Breach Notification Regulatory Regime and House Science Subcommittee on Oversight and Research/Technology on Emerging Blockchain Technology Applications.

 

ADA Commercial Call for Action

On Friday, NAR launched a commercial CFA to 72,000 Realtors as well as to all House FPCs in support of H.R. 620, the ADA Reform And Education Act of 2017, that will be coming to the floor of the House likely on Thursday this week.  This CFA will no count towards President’s Cup.  Most of your members will not receive the email asking them to take action, but we welcome all members to take action if they are interested.

• CFA Link
• ADA Issue Page
• NAR Letter of Support

 

Association Health Plan

In an effort to expand access to more affordable, high-quality health insurance coverage, the Department of Labor proposed a rule allowing self-employed individuals and small employers to purchase health insurance through professional or trade associations by expanding access to Association Health Plans (AHPs). NAR supports the proposed rule, which could provide more affordable health insurance options for many REALTORS®. However, there are some important clarifications needed in the rule to maximize participation by self-employed real estate professionals. The final rule could also be subject to legal challenges further delaying finalization.

• AHP Issue Page
• Attached is Association specific letter in support of the proposed rule you can use with your association letterhead & President signature
• NAR also encourages interested members to write a letter to the DOL in support the proposed rule and provides this member template letter
• To submit letters please visit the Comment function on the Federal Register
• The deadline for comments is March 6, 2018.

 

Budget Deal

On February 8, 2018, NAR sent a letter to Leader McConnell and Democratic Leader Schumer expressing support for the Bipartisan Budget Act of 2018. The federal budget deal signed by the President on Friday contains a number of wins for real estate, including a temporary extension of federal flood insurance and extension of NAR-backed tax provisions that include relief from debt forgiveness, the deductibility of mortgage insurance premiums, and several energy-efficiency related provisions.

Flood Insurance

Extends the National Flood Insurance Program until March 23, giving lawmakers time to work on longer term reauthorization and reform legislation. It also adds $27 billion in mitigation and resiliency funds to address issues arising from last year’s hurricanes. The extension makes $12 billion available under the Community Development Block Grant (CDBG) program to fund U.S. Army Corp of Engineers flood mitigation projects.

Tax Extenders- Retroactively extends for the 2017 tax year: (All tax provision extensions are only for 2017)

• Mortgage Debt Forgiveness
  This provision will prevent homeowners who were forced to sell their home through a short-sale last year, or who faced a foreclosure, from being taxed on the “phantom income” they received when a lender cancelled their debt.
• Deduction for Mortgage Insurance Premiums
  This provision will allow approximately four million homeowners to deduct the mortgage insurance premiums they paid as part of their mortgage. NAR estimates that roughly two million homebuyers annually purchase a home that is subject to mortgage insurance. This provision helps make homeownership more affordable for first time and entry-level homeowners.
• Energy efficient commercial buildings deduction
  This provision extends the deduction for the cost, up to $1.80 per square foot, of energy-efficient commercial building property. Increasing the energy efficiency of commercial buildings not only helps the environment, it saves building owners and tenants money that they can use to grow their businesses and the economy.

In addition to these three major tax extensions, there are also several more minor extenders that affect real estate, as follows:

• Nonbusiness Energy Property Credit: 10 percent of amounts paid for qualified energy efficiency improvements (e.g., energy-saving roofs, windows, skylights, and doors) and 100 percent of amounts paid for qualified energy property (e.g., high-efficiency water heaters, air conditioning units, and furnaces), with respect to the taxpayer’s principal residence;
• Residential Energy Efficiency Property Credit: extends and phases down the temporary components of the section 25D residential energy property credit for fuel cells, distributed wind property, and geothermal heat pumps;
• Credit for energy-efficient new homes: extends the $1,000-$2,000 credit for construction and sale of qualified new energy-efficient homes.

 

Small Business Loans Ease: NAR Regulatory Update

The Small Business Administration has eased equity requirements for loans that can help businesses expand. Also, USDA is going through a process that could result in fewer households eligible for federally backed home financing in rural areas. Check out this video with DC Staff on changes on the regulatory front.

 

2018 Election Cycle Questionnaire:

The federal candidate questionnaire has finally been updated and approved for the 2018 election cycle. Please reach out to me before scheduling any in person interviews for open seats.

• Screening Instructions for State/Local Associations
• Candidate Questionnaire
• Cook Report- House Race Ratings
• Cook Report- Senate Race Ratings

 

 

Thanks and have a great week!

 

-April

 

April Brown Gavin

 

National Association of REALTORS®

Senior Political Representative

abrown@realtors.org