It was a situation that sticks in the mind of Mann Mortgage Loan Officer Christine Farrington: A local veteran with a razor-thin budget was trying to buy a home.
“We could not afford $1 more on his payment, and the only property he could buy was a single-wide trailer,” Farrington recalled recently.
Fortunately for the man, he was able to secure a loan through a Montana Board of Housing program, which was the only investor that would approve the loan. Farrington was also able to secure a lower interest rate for the man to help keep the monthly mortgage payment as low as possible.
“Without the Board of Housing, none of that would have been possible,” Farrington said.
The state’s Housing Division, which creates affordable-housing opportunities across Montana, encompasses a wide array of programs that are funded through a variety of federal funding sources, but a bulk of these resources could go away under the proposed tax reform emerging in Washington, D.C.
The Northwest Montana Association of Realtors, based in Kalispell, organized an impromptu meeting last week with local bankers, mortgage brokers and realtors to inform representatives from U.S. Sen. Jon Tester, D-Mont., about the impacts of the House GOP tax cut plan being proposed in Congress.
Congressional Republicans are seeking a sweeping overhaul of the nation’s tax code, an effort that would be the largest tax reform in 30 years. Proponents of the bill say the plan will cut taxes for middle-class Americans and simplify the tax code. The White House said a typical family of four could expect their taxes to be reduced by $1,182 annually.
Yet in order to guarantee savings, cuts must be made, and the ripple effects from some of those reductions could hurt low-income residents and first-time homebuyers, according to local officials.
According to Erica Wirtala, public affairs director with NMAR, the cuts could negatively impact programs such as Habitat for Humanity, the Montana Board of Housing and tax-credit programs for a good portion of Montana residents.
In 2016, the Montana Board of Housing helped 600 families with $82 million in financing for homeownership, according to state statistics. In the 40-year history of the organization, more than 43,000 families have received $3.2 billion in financing for home buying.
“We just want to make a very loud and clear message to Sen. Tester how important it is that these cuts do not happen to the Board of Housing,” Wirtala said.
Marney McCleary, housing director with the Community Action Partnership of Northwest Montana, said the GOP plan would cut the new market tax credit program, which “has been an essential tool for community revitalization,” by helping drive new business investment in hard-hit communities, many of which are rural.
Others said the eliminated tax credit programs and other assistance would discourage first-time homebuyers.
“Rents keep going up and home prices keep going up,” Clint Ekern, a loan officer with Mann Mortgage, said. “You’ll have a mass exodus of people from the valley that just no longer can afford to live here.”
Tester has been initially critical of the GOP tax bill and has established a portal on his website seeking feedback from Montanans about the proposals. U.S. Rep. Greg Gianforte, R-Mont., has come out in support of the bill, saying the tax reform “promotes economic growth, creates more Montana jobs, increases Montanans’ paychecks, and creates a fairer, simpler system.
The proposal plan remains up for debate in Congress while Senate Republicans have proposed their own tax reform plan.