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New homebuyer help

Initiative turns $5,000 tax credit into down-payment cash

(Published May 3, 1999)

By OSCAR ABEYTA

Staff Writer

Buying a home in the District could become much easier for some people under terms of a $1 billion housing initiative Fannie Mae plans over the next four years, including a way to use the District’s first-time homebuyer tax credit for a down-payment.

Fannie Mae Chairman and CEO Franklin D. Raines was joined by Mayor Anthony A. Williams and Delegate Eleanor Holmes Norton and most of the city council at a press conference at the Frederick Douglass home in Southeast Washington to announce the initiative. The nine-point plan unveiled includes plans to reclaim city-owned properties, expand employer-assisted housing programs, and launch a citywide homeownership initiative.

One of the most well-received announcements, prompting cheers at the press conference, was a plan to turn the District’s $5,000 homebuyer’s tax credit into cash so buyers can use the money for a down-payment on a house.

Norton used the opportunity to announce she has introduced legislation to make the tax credit permanent. The initial tax credit would have expired Sept. 30, the end of the current fiscal year, but President Clinton extended it for one more year. Norton said home sales in the District increased 50 percent in 1998, which she attributed to the tax credit. Home sales in 1998 topped 21,000, up from about 14,000 the year before.

Fannie Mae also plans to create an investment fund of $100 million, complete a housing initiative in LeDroit Park and help the city re-engineer the regulatory process.

"This $1 billion investment will serve first-time home buyers," Raines said. "It will serve all neighborhoods, it will serve low-, moderate-, and middle-income families throughout the District."

Copyright 1999, The Common Denominator