House Ways and Means Committee Chairman Charles Rangel, D-N.Y., has introduced a bill to help struggling homeowners with a refundable tax credit, even as a bipartisan Senate bill faced a threatened veto from the Bush administration.

Rangel's bill, the Housing Assistance Tax Act of 2008, is designed to complement a bill that the House Financial Services Committee has been crafting to address the growing rate of foreclosures.

Rangel's bill would provide first-time homebuyers with a tax credit to assist in making a down payment on a home. Individuals and families would be entitled to a refundable credit, equivalent to an interest-free loan, of 10 percent of the purchase price of their home, up to $7,500. Taxpayers would be required to repay the loan to the government over 15 years in equal installments. The credit will be phased out for taxpayers with adjusted gross income in excess of $70,000 ($110,000 in the case of a joint return).

"We need to provide relief to the buyers and families themselves, not just the banks and builders," said Rangel (pictured) in a statement.

The bill also provides an additional standard deduction for real property taxes to help homeowners who claim the standard deduction by allowing them to claim an additional standard deduction of up to $350 ($700 for joint filers) for state and local real property taxes. The provision applies for 2008.

In addition, Rangel's bill offers a temporary increase in the low-income housing tax credit from $2 for each person residing in a state by an additional $0.20 per resident. A temporary increase in mortgage revenue bonds allows for the issuance of an additional $10 billion of tax-exempt bonds to refinance sub-prime loans, provide loans to first-time homebuyers and to finance the construction of low-income rental housing. 

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