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DESCRIPTIONThe official publication of the El Paso Association of Builders
Key provisions in the tax extenders packageinclude:
Section 45L tax credit for energy efficient newhomes. Provides builders a $2,000 tax credit forexceeding energy standards by 50%. The baseenergy code is the 2006 International EnergyConservation Code plus supplements. Section45L is expected to save home buildersapproximately $380 million annually in taxes for2015 and 2016 construction activity.
Fixed credit rate for 9% and a few 4% low-income housing tax credit (LIHTC) projects. Thebill will renew the 9% fixed rate for 2015 and2016 allocations. In a step forward formultifamily developers, it also will now include afixed 4% LIHTC rate when used to purchase andimprove existing properties that are not federallysubsidized or financed with tax-exempt bonds.
The 4% fixed rate also requires the property tobe placed in service after the date of enactmentfor credit allocations made before Jan. 1, 2017.
Section 25C tax credit for qualified energyefficiency improvements. This is a 10% tax creditsubject to a $500 lifetime cap, with lower caps forcertain products like windows, for consumers toinstall qualified energy efficient upgrades. Theextension of 25C will now make eligible allroofing materials meeting the Energy Starguideline and also updates standards for hotwater heaters, biomass fuel stoves, oil hot waterheaters and doors and windows. Remodelersoften leverage 25C tax credits when working withclients. Section 25C is expected to save homeowners who remodel almost $700 millionannually in taxes for 2015 and 2016improvements.
Section 179D energy efficient commercialbuildings deduction. Provides a deduction up to
$1.80 per square foot for commercial buildings,including multifamily buildings built under thecommercial code, that exceed specific energyefficiency minimums.
Section 163 deduction for mortgage insurance.Allows taxpayers, subject to an income cap, todeduct premiums paid for private mortgageinsurance and FHA/RHA/VA insurancepremiums. The deduction for mortgage insuranceis expected to save home owners more than$1.1 billion per year for tax years 2015 and 2016.
Bonus depreciation. Extends the 50% bonusdepreciation through 2016.
Section 179 expensing. Increases the maximumexpensing amount to $500,000 for qualifiedproperty on up to $2 million in property placed inservice.
Mortgage forgiveness tax relief. The provisionwould eliminate any taxes home ownersmightface from banks when renegotiating theterms of a home loan and forgiving a portion ofthe outstanding mortgage. This would apply onlyto principal residences and through the 2016calendar year.
Also of note, the measure includes additionalreporting requirements for mortgage interest thatwould allow the IRS to better enforce the existingrules for claiming the mortgage interest deduction.Currently, mortgage lenders report to the IRS theborrowers mailing address, taxpayer identificationnumber and mortgage interest paid. Under thisprovision, lenders would be required to include thephysical address of the property as well as themortgage balance. These new rules would allowthe IRS to better enforce the $1 million acquisitiondebt limit, the $100,000 home equity loan limit andthe second home rule.
The House has not yet moved on renewal of theextenders. Final resolution of the extenders is notexpected to occur until later this year.
Builders utlookwww.elpasobuilders.com 2015: issue 7
Senate Panel Approves NAHB Priorities asPart of Tax Extenders Package
The Senate Finance Committee
today voted 23-3 to renew scores
of temporary tax provisions
known as tax extenders that
expired this year, including all
those of interest to the housing
community. In general, the
provisions are granted a two-year
retroactive renewal through the
end of tax year 2016, dating back
to the start of 2015.
CFPB AnnouncesNew Lending RulesSet for Oct. 3
The Consumer Financial Protection Bureau(CFPB) announced today that it will be institutingnew mortgage lending rules effective Oct. 3. Theimplementation date was originally scheduled forAug. 1 and then pushed back to Oct. 1, beforebeing delayed an additional 48 hours due to latepaperwork filings.
What does this mean for home buyers, homebuilders and lenders?
On Oct. 3, the Good Faith Estimate, the Truth inLending and HUD-1 Settlement Statements will bereplaced by the CFPBs new integrated disclosureforms, the Loan Estimate and the ClosingDisclosure.
The biggest change is that the ClosingDisclosure must be provided to the consumer a
full three days prior to closing, and if there arecertain changes during that 72-hour period, theclosing could be delayed.
NAHB, Others Seek Hold Harmless PeriodNAHB and other industry allies have urged
CFPB Director Richard Cordray to provide a hold-harmless period for the initial months of the newprocess so that good-faith efforts to comply withthe new disclosure regime do not expose lenders,settlement service providers and others toregulatory penalties and litigation.
The American Bankers Association reported
Cordray stating that his agency would be sensitiveto those who are just trying to get it right duringhis appearance before the Senate BankingCommittee on July 15. And so for the first period,which may last many months, the other agenciesand ourselves as we work on this, if we seeerrors, we will point out what they are and howthey should be corrected, said Cordray. We willnot be looking to be punitive to people.
While NAHB appreciates the tone taken byCordray, NAHB is urging Congress to pass Houseand Senate bills H.R. 2213 and S. 1711, whichwould provide a temporary safe harbor fromenforcement of the new lending rules through theend of the year.
To prepare those in the residential constructionfield for the impending rule changes, NAHB held awebinar June 24 to explain how to workproactively with lenders and settlementstakeholders to avoid unnecessary delays tohome closings. A replay of this webinar will beposted on nahb.org.
2 Builders Outlook 2015 issue 7
WERE PROUD TO SERVE THOSE WHOVE SERVED US ALL.
I hope that everyone is having aproductive, successful, and funsummer so far. One thing is for sure, ithas been a hot and humid one. Asmany of you already know, theassociation does not meet in July andnow there are a lot of awesomeevents and opportunities coming ourway to end the year.
Our next Board and GeneralMeetings will be on Wednesday,August 12, at noon. I challenge all ofour board members to bring a guest. Iwill be bringing a guest.
I invite you to participate in thisyears EPAB Bowling eventWednesday, August 19th. A team offour costs $100.00 and this includes
lunch and bowling. This will be a greatevent for fun and networking! Ourcompany signed up for three teamsand is ready to take on any friendlychallenges that may come our way.
Please make sure that you haveOctober 2015 and September 2016marked on your calendars as this iswhen two industry changing eventswill take place. In October of this yearanyone that closes on a new homewill have to sign documents two timesthree business days apart in additionto a newly designed set of paperwork.If anything, changes and I meanANYTHING, even the insurance quotebeing off by one cent, then the Buyermust sign a new disclosure and start
the three day waiting period all over.This is going to almost eliminate thelast week of the month, but I amconfident that our awesome title andmortgage companies will make it assmooth of a transition as possible.
September of 2016 brings yetanother set of challenges to ourindustry as this is when the new IRCand Energy Codes will beimplemented in our city. Ray has beenin contact with the city to setupmeetings to review the upcomingchanges that will affect us. If you areinterested in participating in the reviewplease let Ray or myself know.
Our industry, from what I can gather,is doing slightly better as new home
closings are up year to year aroundsix percent. Though the figure showspromise, it is still hit or missdepending on who you ask. Oneperson (supplier, builder, orcontractor) will tell you they are doingamazing and others will tell you theyneed more work.
In closing, it is that time of year,children are now starting to return toschool so please remind yourcontractors and employees to watchtheir speed as they drive through thecity and new communities. I wish all ofyou continued success. Be safe andGod bless you!
32015 issue 7 Builders Outlook
Edgar MontielPresident,El PasoAssociation of Builders
Upcoming events make for a busy
second half of 2015
Your Online Showroom for New Homes
Welcome to our July edition, we call
it issue 7. The association traditionally
uses July as a month to relax and
regroup, and this July is no different.
So with that in mind youll notice we
dont have any meetings to report
about or events. But that doesnt
mean your association is not busy for
We have scheduled a number of
events for the upcoming months and I
want to particularly thank our
Presenting Partners in these. First is
our upcoming EPAB Bowling Event
(we used to call it a tournament but
that would involve having to have
some skills, so we now just use
event, lol). Our partners are HUB
International, HUNT, Foxworth
Galbraith, StrucSure Home Warranty
and Haskins Electric. All of these
members jumped in with both feet