House Energy and Commerce Committee Chairman John Dingell has released a plan to deny mortgage interest deductions to people owning large homes. Pitched as an effort to combat global warming, the bill would phase out the mortgage interest write-off, beginning with 3,000-square-foot homes, which would lose 15 percent of their deductions. Owners of 4,200- square-foot or larger homes would receive no deduction. Exemptions are included for certain historical homes, owners who purchase carbon offsets, and houses built to certified high energy-efficiency standards. In a statement, Dingell said he is targeting big houses because they have contributed to sprawl and longer commutes.
HUD Bans Downpayment Assistance
The Department of Housing and Urban Development (HUD) has published a final rule banning downpayment assistance programs financed by charitable organizations. The National Multi Housing Council noted in its Washington Update that such a move would have been “unthinkable” before the subprime meltdown. The Internal Revenue Service, General Accounting Office, and the HUD Inspector General’s Office have criticized such downpayment programs. They contend that sales prices in such deals often are inflated, and foreclosure rates for loans involving assistance are twice the rate of other Federal Housing Administration loans. Nonprofits AmeriDream and Nehemiah Corp. have filed a lawsuit seeking to block the HUD rule.