When the National Association of REALTORS® announced model legislation for First-Time Homebuyer Savings Account (FHSA) programs, Alabama REALTORS® was right there with them. Using resources from the REALTOR® Party, the association had a bill drafted, and commissioned polling and economic research to help convince legislators of its merit. On March 28, when Alabama Governor Kay Ivey signed that bill into law, Alabama joined seven other states in the nation offering this progressive tax benefit. Allowing $5,000 in tax-free annual savings ($10,000 for couples) in accounts designated for first-time down payments and closing costs, the law requires contributions and interest deductibles not exceeding $25,000 ($50,000 for couples) to be used within five years towards the purchase of a home.
“Homeownership is the foundation of strong families and healthy communities,” says Stacey Sanders, AAR’s Public Policy Committee Chair. “Alabama REALTORS® is wholeheartedly committed to preserving and enhancing homeownership as a fundamental component of the American Dream, and we know that the First-Time Homebuyer Savings Accounts will incentivize people to stay and live here in Alabama, in homes that they own.”
Just over a month before the 2018 legislative session began in January, AAR sought polling from the REALTOR® Party using an Issues Mobilization Grant. The results were clear: 90% of Alabamians believe that buying a home is a good financial decision; 79% of Alabama voters see the down payment as the biggest obstacle to buying a home; and 77% of Alabama voters favor the FHSA program. The economic research conducted by NAR showed that an estimated 590 to 3,675 eligible households would use an FHSA, which would result in a positive net economic impact on the state ranging from $2.4 million to $26.8 million in annual economic activity, including the creation of up to 245 jobs in numerous sectors of the economy affected by homeownership. These numbers shaped the talking points that AAR brought to the State House to persuade legislators to support the bill, which had been drafted, and was sponsored by State Representative Kyle South in the House and Senator Greg Reed in the Senate.
AAR created a website resource for the proposed First-time and Second-chance Homebuyer Savings Account program, but the polling and economic data were so strong that there was no need for the association to activate the rest of its planned campaign to drum up public support.
Jeremy Walker, AAR CEO said, “Legislators in both chambers were supportive of the concept of helping a new generation of first-time buyers overcome obstacles such as student loans and create a path to responsible homeownership. We were able to work through concerns raised and reach a final bill with great consensus on the positive impact it will make in Alabama.”
With the legislation enacted and due to go into effect in January 2019, AAR is planning to develop a consumer campaign to increase public awareness of the new benefit, which also includes a “Second Chance” provision for would-be buyers who have not owned a home in the past ten years. It is planning to create marketing packages that will be available to brokerages and local REALTOR® Associations to share with members and clients across the state. “We’ve had an overwhelming positive response from our members, who are excited about the program and bringing new opportunities to help first-time buyers,” says Walker, adding, “We definitely recommend taking advantage of REALTOR® Party resources to pursue this kind of legislation.”
A five-year sunset provision in the final legislation means that the benefit will have to be renewed down the road, but AAR is optimistic that the success of the Alabama FHSA program will speak for itself by that point, and that legislators will continue to see the advantages it brings to the state and its residents.
To learn more about how Alabama REALTORS® is helping to ease the way for first-time homebuyers, bolster the housing market, and strengthen the state economy, contact Emily Marsh, Political Representative, at 334-386-5345.