Election day is November 4th, but some Washington lobbyists are much more focused on what happens in Congress immediately after the election.

Will there be a "lame duck" session? Will there be a Congressional effort to pass a second 2008 economic stimulus bill, and if so, will it provide new, more direct relief to home buyers?

Democratic leaders in both houses are still debating the timing, but there's little doubt that -- no matter who wins on November 4 -- there will be an effort to put together a new stimulus package -- probably larger than the $150 billion plan passed in February.

This time around, though, housing trade groups want much more direct and targeted oomph for real estate out of whatever stimulus assistance Congress provides.

The National Association of Realtors already is pushing a plan that would give a tax credit to all buyers of houses nationwide -- not just first time purchasers -- and would make the credit non-repayable.

Under housing legislation passed this summer, first time buyers can qualify for a $7,500 federal tax credit, but they have to agree to pay it back to the government over a period of years, or whenever they sell the property.

Though early estimates indicated that thousands of buyers would rush into the market to take advantage of what amounted to an interest-free loan from the government, Dr. Lawrence Yun says the payback requirement has turned off a lot of buyers and reduced the effectiveness of the credit.

Yun says a larger credit than $7,500 "would be better," but as long as the repayment feature is removed, the current amount should be sufficient to stimulate sales and reduce unsold housing inventories.

Meanwhile, the National Association of Home Builders (NAHB) plans to ask Congress for an expanded credit as high as $10,000 to $12,000, with no repayment, and is working on a program to "monetize" the credit up front so that it could be used for immediate downpayment cash by purchasers.

Under the builders' plan, private lenders would extend loans to home buyers at or before settlement, much like tax refund anticipation lenders now provide cash in advance to consumers who are expecting refunds on their federal income tax returns.

The downpayment cash would be paid back, plus interest, when the home purchasers received their tax credits the following year.

We'll keep you up to date on the stimulus plans and timing in the weeks ahead, so check back with us regularly here at Realty Times.

Published: October 27, 2008

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Kenneth R. Harney writes an award-winning, nationally-syndicated column on housing and real estate from Washington, D.C. He is also managing director of the National Real Estate Development Center, a professional education company. He is a past member of the Federal Reserve Board's Consumer Advisory Council, a committee that by federal statute reviews all Fed actions on home mortgage, consmer credit and banking industry regulation. He served as a member of the U.S. Department of Housing and Urban Development's Working Group on Computerized Loan Origination (CLO) systems, and is a member of the Editorial Board of the Fannie Mae Foundation's journal, Housing Policy Debate. He is the author of two books on mortgage finance and real estate.