The Voice for Real Estate 94: Shutdown Rental Income, Committees
NAR looks at new IRS guidance on applying rental income to the new 20 percent business income deduction, makes efforts on Rural Housing Service loan processing, which has been stalled since the federal government shutdown. Also featured: excerpts from testimony before the House Financial Services Committee last month by NAR President-elect Vince Malta on why it’s crucial the federal government maintain an explicit guarantee of conventional conforming loans backed by Fannie Mae and Freddie Mac.
The government shutdown continues. What you need to know
That new 20 percent deduction? Clarity from the IRS on how it applies to rental income
And do you know what you can—and can’t—say to an appraiser?
These stories and more on The Voce for Real Estate.
Hi, I’m Stephen Gasque with the National Association of Realtors.
It’s the longest federal government shutdown in history, and while the impact on real estate has so far been minimal, that will change if Congress and the administration can’t come to agreement soon.
Right now, the most immediate impact is on rural housing. That’s because all applications for loans backed by the Rural Housing Service—which in many rural areas is most home loans—must be reviewed by the agency, but many of its employees are furloughed. Here’s NAR’s Megan Booth with more.
The good news is, most other home mortgage financing isn’t affected by the shutdown. Fannie Mae and Freddie Mac, which are involved in the mist home loans, continue to operate without interruption. Same thing with FHA and VA loans.
But a prolonged shutdown would be damaging to real estate, because it would erode the most important factor in sales of homes and commercial properties: confidence. Here’s NAR Chief Economist Lawrence Yun.
NAR is monitoring the shutdown closely. Look for real-time updates as events unfold.
One of the big wins in the 2017 Tax Cuts & Jobs Act is the 20 percent business income deduction. But lawmakers left it unclear whether the deduction can be taken for your renal income. We have an answer to that now. The IRS has released guidelines on how to apply that deduction to your rental income. Here’s NAR Vice President Joe Ventrone.
Get details on this IRS action by searching “tax update” on nar.realtor.
We have other news from Washington. NAR President-elect Vince Malta was on Capitol Hill recently to testify on how to preserve safe and affordable mortgage financing as Congress decides what to do about the two secondary mortgage market companies, Fannie Mae and Freddie Mac. Malta praised legislation that was introduced in the last session of Congress because it would maintain an explicit government guarantee on conforming conventional mortgages and take other steps NAR is seeking. But Malta said underwriting standards must remain flexible and not lock in a minimum required downpayment.
Malta also called for the creation of a mortgage market liquidity fund. That’s an NAR idea to set aside some of Fannie and Freddie’s profits to cover any losses to the companies if the market goes bad. That way, taxpayers won’t be on the hook to help them out. We’ll keep you updated as the new Congress starts to tackle mortgage finance reform.
No one knows more than you what goes into setting the price for a home. Comparables are essential, but every home is unique, too. Getting the balance right is one reason what you do is so important to your clients.
That’s why you shouldn’t hesitate to be there when the appraiser comes to the property to prepare the valuation report for the lender. But there are dos and don’ts you should follow to help ensure appraisers can do their job objectively while still benefitting from your insight into the property. Here’s NAR attorney Charlie Lee with more in the latest Window to the Law video.
Access that video by searching “working with appraisers” on nar.realtor.
Did you know NAR has almost 100 committees and that each year thousands of Realtors are chosen to serve on these committees and help guide the association’s decisions?
If you’d like to put your insight and experience to work on behalf of your industry, consider submitting an application to be a committee member. NAR will be taking applications beginning March 1. Here’s NAR President-elect Vince Malta and NAR First Vice President Charlie Oppler on why your willingness to serve is so important to your association.
Again, applications are accepted beginning March 1. Learn more about the committees and the application process by searching “committee members and liaisons” at nar.realtor.
And that’s our show for the week of January 21. You can get more on everything we talked about today at The Voice for Real Estate page on nar.realtor. Thank you for joining us and be sure to join us again as we bring you all the latest news on The Voice for Real Estate.