The credit, which had been passed earlier this year as part of the attempt to stimulate the economy, allows anyone who purchases a new home through November to claim a tax credit of $8,000.
"The Internal Revenue Service recently reported that well over one million taxpayers have benefited from the tax credit, many of these credit union members. We are experiencing this positive impact at a local level on a daily basis," wrote ACUMA President Robert Dorsa in an Oct. 22 letter to NCUA Board Chairman Debbie Matz and leading federal legislators.
"While the tax credit program has enabled more of our members to realize the American dream of homeownership, it has also helped to improve the overall housing market. We feel homeownership is one of the foundations of economic stability. This emphasizes the need to ensure we do not upset a fragile housing market just as we begin to see signs of stabilization. Many small businesses rely on the housing market and are starting to experience positive gains as the housing market recovers," he added.
Dorsa said the association directed its letter to Matz but included legislators and media outlets because it wanted to get the largest impact from its efforts. Ideally, ACUMA would like the NCUA to understand and get behind the support for the credit as well as legislators, though Dorsa acknowledged any decision about whether or not to extend it rests solely with the Congress.
Dorsa said ACUMA had contacted CUNA and NAFCU for their support but found that their legislative plates were full already. "One of our considerations for this is when contacting both CUNA and NAFCU, they are focused on other legislative issues and again we felt there were definitely time considerations and the fact that the ACUMA board felt we need to take some action on behalf of our members, who for the most part agree with our position," Dorsa wrote in an e-mail about the letter.
In response to a question about why it was not lobbying in favor of renewing the tax credit, CUNA said it did not generally lobby on tax credits and NAFCU replied that its members had not given extending the tax credit much priority.
In its efforts, ACUMA also took the opportunity to contend the credit should not just be extended but also expanded.
"While the tax credit has proven to be effective in helping first-time homebuyers, a large number of Americans are thinking about moving from their current home for various reasons and might be incented by a tax credit to do it now, when the economy needs it the most," Dorsa wrote, adding that the amount could be increased to $15,000 in some circumstances and required to be repaid if the home is resold within three years of its purchase.
"The borrower should repay the tax credit only if the residence is sold within the first three years (exception for employment-related moves) or in the event of a taxpayer default on any other mortgage that existed at the date the tax credit is claimed. This would discourage 'buy and bail' behavior, where a borrower uses the tax credit for his or her advantage and walks away from an existing mortgage obligation," ACUMA wrote.