Realtor Government Affairs

Top Legislative Priorities

Small Business Health Plans

Support legislation that would enable small businesses and self-employed workers to band together to negotiate lower health insurance costs. Send a letter to Congress now!

Banks in Real Estate

Help enact legislation that will permanently bar banks from entering real estate brokerage and property management.

Government-Sponsored Enterprises (GSEs): Fannie Mae, Freddie Mac, Federal Home Loans

Help reform and maintain the important role that GSEs play in sustaining the residential real estate market.

Do-Not-Call / Do-Not-Fax / Do-Not-Email

Help NAR protect REALTORS® from unfair and costly changes to their marketing practices.

Affordable Housing Tax Credit

Help support the American dream of homeownership. Tax credits to developers will make more affordable homes available.

RESPA (Real Estate Settlement Procedures Act)

RESPA governs the real estate settlement process. NAR continues to monitor reform efforts and protect the interests of REALTORS® and consumers.

Accomplishments for 2004

The following summarizes what NAR was able to achieve in 2004:

Do-Not-Fax

NAR secured an extension of the Do-Not-Fax rules from December 31, 2004 to June 30, 2005 pending clarification of Federal Communications Commission rules prohibiting the sending of unsolicited advertisements.

This new rule change was scheduled to go into effect August 25, 2003. Because of the rules onerous effects impacting Realtors^Òbusiness relationships, NAR conducted a multi-pronged advocacy effort encompassing regulatory and legislative options. In conjunction with our state associations we filed a petition to extend the stay to give Congress time to consider legislative remedies. That stay was granted on October 1, 2004. Additionally, working with a coalition of over 400 organizations and businesses NAR secured the introduction of House and Senate legislation creating statutory authority for the longstanding established business relationship exception to the fax rules. Our bill (H.R.4600/S.2603) was approved by the full House in July but was the victim of the legislative schedule in the Senate. The bill’s sponsors have agreed to reintroduce the legislation early 2005.

VA Loan Limits

NAR-backed legislation increases a veterans loan guaranty amount from $60,000 to $83,425. As a result veterans will be able to purchase a home up to $333,700 furthering their homeownership aspirations particularly in high-cost markets. To ensure the VA loan ceiling adjusts with the marketplace, the legislation indexes the loan amounts to 25 percent of the Freddie Mac conforming loan amount. Thus, the VA loan limits will automatically adjust in future years.

NAR continuously examines government mortgage programs to ensure their missions are achieved responsibly and efficiently, and to ensure these programs reflect today’s evolving mortgage market. Of note to NAR, the VA loan amount lagged other government and private mortgage programs and was restricting veterans from homeownership opportunities. This was especially true in hot real estate markets and high-cost areas of the country. Equally troubling, unlike the FHA program, the VA home loan program does not enjoy an automatic annual adjustment to reflect home sales price increases. NAR encouraged Senator Jon Corzine (D-NJ) and Rep. Ginny Brown-Waite (R-FL) to introduce legislation addressing these concerns. Their bills increased the veteran’s guaranty to $83,425, allowing a mortgage of up to $333,700, and indexed the guaranty to 25% of the Freddie Mac conforming loan amount to allow for future annual adjustments. Since Freddie Mac has announced that its 2005 conforming loan amount will be $359,650, the new 2005 VA guaranty amount will be $89,912. This will permit veterans to purchase homes up to $359,650.

RESPA Reform

NAR urged the Department of Housing and Urban Development to withdraw its proposed rule reforming the Real Estate Settlement Procedures Act (RESPA) because of its onerous impact to the real estate industry.

NAR worked with Reps. Ruben Hinojosa (D-TX) and Judy Biggert (R-IL) who sent a letter to the Office of Management and Budget calling for rejection of the proposed changes to RESPA. Their letter echoed NAR’s concerns and was signed by more than 226 Members of Congress. As a result of this tremendous level of Hill support, on March 22, 2004 HUD Secretary Alfonso Jackson notified OMB that HUD decided to withdraw the rule.

Leasehold Improvement

NAR-backed legislation (H.R.4520), signed into law October 22, includes a temporary, two-year provision which reduces the recovery period for leasehold improvements from 39 years to 15 years.

What started out as an effort to address an unfavorable World Trade Organization ruling in an export tax incentive case blossomed into a comprehensive overhaul of corporate and international taxation encompassing a grab bag of tax initiatives to enhance business activity and create jobs. NAR used this opportunity to advocate provisions beneficial to real estate. The centerpiece of our advocacy efforts was a reduction of the cost recovery period for leasehold improvements from 39 to 15 years. We worked to have the provision made permanent, but revenue constraints prevented that result. Nonetheless, the statutory precedent has now been set, so NAR will be on firm footing in working to have the provision extended. Besides the leasehold improvement provision we were also successful in advocating inclusion of several other provisions favorable to real estate investors. These include technical corrections to real estate investment trusts; funding for “green bonds” for building projects that reduce electric consumption; and tax relief associated with the sales of brownfields properties.

Flood Insurance

NAR-backed legislation (S.2238), signed into law June 30, reauthorizes the National Flood Insurance Program (NFIP) through 2008 and establishes a pilot program that will increase flood insurance premiums for owners of repeatedly flooded properties who refuse government offers of mitigation assistance.

Prior to enactment of S.2238, the NFIP was authorized annually through the appropriations process. This proved burdensome for homeowners and the real estate industry due to disruptions in flood insurance coverage. To lessen the problems, Congress indicated an intent to reauthorize the NFIP for an extended period. NAR used the opportunity to not only advocate a multi-year reauthorization and but press for changes to the program to improve its fiscal soundness. NAR’s Board of Directors adopted policy in 2003 encouraging a three-part approach to reduce repetitive losses under the NFIP. NAR’s approach represented a “win-win” ensuring that insurance payouts will be reduced by properly mitigating or buying out the worst repetitive loss properties. And, at the same time, NAR’s approach allows the property owner to remain in the NFIP while paying a premium that adequately reflects the property’s flood risk. We subsequently encouraged Rep. Doug Bereuter (R-NE) and Senator Jim Bunning (R-KY) to introduce legislation reflecting our recommendations. As a result an improved NFIP is authorized through FY2008.

Banks in Real Estate

NAR secured another one year prohibition preventing banks from engaging in real estate activities.

NAR worked closely with Congress which approved its omnibus appropriations bill containing another one-year prohibition against large banks entering the real estate brokerage, leasing and property management business. In the House, NAR encouraged Rep. Anne Northup (R-KY) to reintroduce the blocking amendment which was approved September 9 in the House as part of the Transportation-Treasury Appropriations bill. In the Senate, NAR encouraged Sen. Richard Shelby (R-AL) to sponsor stronger, permanent, prohibitory language in a counterpart bill, S.2806. If approved, the Shelby language would have the force of law to prevent the proposed activity for the future. However, during lame duck negotiations involving omnibus appropriations to fund the government, House leadership removed the Shelby provision from the final omnibus bill. In 2005 NAR will again pursue reintroduction of legislation permanently barring banks from entering real estate.