WASHINGTON—A “major roadblock” exists to constructing affordable housing, but credit unions can offer a solution, NAFCU stated in a letter to the Senate Finance Committee.
The letter was sent ahead of the committee’s hearing on the role of tax policy in expanding the supply of affordable housing and was sent in support for the Neighborhood Investment Act and the Affordable Housing Credit Improvement Act.
Vice President of Legislative Affairs Brad Thaler stated the pair of bills would “help address America’s housing affordability crisis and provide common-sense housing solutions for underserved communities.”
In the letter, Thaler suggested a major roadblock to building homes or renovating abandoned or deteriorated ones in underserved, rural, and urban areas is that the “cost is greater than the home’s value when completed.”
He further detailed how NAFCU believes the Neighborhood Homes Investment Act would tackle this problem by providing a tax credit to cover part of the cost of homes for owner-occupancy. The letter also pointed out that the credits would only be an option “for modestly priced homes in communities characterized by high poverty, low incomes, and low home values.”
Support for Act
Regarding the Affordable Housing Credit Improvement Act, Thaler wrote that the bill would increase the current annual Low-Income Housing Tax Credit by 50% to allow for an increase in production and preservation of affordable housing. Thaler indicated that since the inception of the Low-Income Housing Tax Credit, “it has been responsible for virtually all the production and preservation of affordable housing in the United States.”
Additionally, Thaler touted credit unions’ ability to “provide quality loans through solid underwriting practices” and that the industry will continue playing a role in affordable housing solutions.
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