McConnell's 4% Buy Down Gaining Momentum

Senate support for adding a housing component to the economic stimulus bill is growing and a proposal by minority leader Mitch McConnell, R-Ky., to include a 4% mortgage rate buy down program is gaining bi-partisan interest. "This proposal has been getting a lot of attention from many different sources and it appears that Congress is very seriously considering it," said Francis Creighton, the Mortgage Bankers Association's chief lobbyist. National Association of Home Builders chief executive Jerry Howard said senators realize that they have to do more to fix the housing market and stimulate home sales. The builders support what Sen. McConnell is trying to do. "I am not sure that 4% is enough to have the kind of stimulus impact we are pushing for," the NAHB CEO said. The builders have been lobbying for a buy down program that will provide a 2.9% mortgage rate for the first half of 2009 and a 3.9% rate in the second half. The National Association of Realtors is backing the McConnell proposal. But the MBA wants to see how it is structured and how it will be phased out. If the buy down program expires in 18 months, MBA is concerned a sudden jump in mortgage rates could be disruptive.