Bipartisan Bill Would Extend State Homebuying Benefits to Surviving Veteran Spouses

A bipartisan effort between two congressional representatives in Washington could pave the way for surviving spouses of military veterans to gain access to first-time housing benefits state-by-state.

Representative Gwen Moore (D-Wisc.) and Representative Rudy Yakym (R-Ind.) introduced the Veterans Surviving Spouse Parity Act on July 23 to help surviving spouses of veterans gain access to housing programs that benefit first-time homebuyers.

Under current law, surviving spouses of veterans can access federal VA home loans but not state-run Mortgage Credit Certificate (MCC) and Mortgage Revenue Bond (MRB) programs.

“These are federal tax credits and federal bonds used by these state programs, and yet the survivors of veterans were not eligible,” Congresswoman Moore said in an interview with Military.com. “There’s a tremendous sacrifice when it comes to serving. But housing is one thing where military families could have some stability.”

Legislation Inspired by Surviving Military Spouse

The legislation was inspired by a constituent of Rep. Moore, whose late spouse was a veteran who qualified for a VA home loan decades ago. Yet, the surviving spouse couldn’t qualify for her state’s Mortgage Credit Certificate program after her husband’s death.

“Literally, a loan officer called our office saying they had a surviving spouse of a veteran who had taken advantage of lower interest rates for veterans and first-time home buyers,” Moore explained. “But when her veteran died, and the surviving spouse wanted to downsize, she wasn’t eligible for the state-operated program, which is of considerable benefit.”

Congressman Yakym calls the legislation a necessary fix.

“This country owes everything to the men and women who fight for our freedom, and to the surviving spouses who carry on without them.

We owe it to these families to give them stability, and that starts with owning a home.” Rep. Yakym said in a statement. “This bipartisan bill closes that gap, so surviving spouses can access the same homeownership resources their veteran spouses could. I thank Rep. Moore for her leadership on this bill and for standing up for these families.”

According to the National Council of State Housing Agencies (NCHSA), a Mortgage Credit Certificate (MCC) is a homebuyer assistance program issued by state and local housing agencies. It lets eligible first-time buyers claim a dollar-for-dollar federal tax credit on a portion (typically 10% to 50%) of their annual mortgage interest, up to $2,000 per year, for the life of the loan.

MCCs are issued directly to qualifying homebuyers, who are then entitled to a non-refundable federal tax credit annually. MCCs lower costs for low-and moderate-income homeowners, which can make sustainable homeownership possible. To qualify, buyers must typically be first-time homeowners. However, there are some exceptions to the rule, including for veterans.

This bill creates an exception for surviving spouses, too.

“For nearly 20 years, state housing finance agencies have been better able to help veterans purchase homes through their Mortgage Revenue Bond (MRB) and Mortgage Credit Certificate (MCC) programs because of a one-time exemption to those programs’ first-time home buyer requirement,” Stockton Williams, Executive Director of the National Council of State Housing Agencies, said in a statement. “We commend Representatives Gwen Moore and Rudy Yakym for introducing legislation to extend this benefit to the spouses of those members of the armed forces who made the ultimate sacrifice.”

Rep. Moore said the surviving spouse who sparked her idea for the legislation simply wanted to take advantage of a state program that uses federal funds earmarked for military families, but was denied.

This widow wanted to change houses, wanted to downsize, couldn’t deal with the memories or was older and couldn’t handle affairs, or whatever, and couldn’t. It really showed a glaring gap in our tribute and support to the families and members who serve.

Real Estate Organizations Extend Endorsements

Several organizations have already endorsed the legislation, including the National Council of State Housing Agencies, Veterans Association of Real Estate Professionals, Paralyzed Veterans of America and the National Association of REALTORS®.

“By extending eligibility for Mortgage Revenue Bond and Mortgage Credit Certificate programs to qualifying surviving spouses, this legislation removes an unnecessary barrier to affordable homeownership and helps ensure these families have access to the housing resources they have earned,” Shannon McGahn, Executive Vice President and Chief Advocacy Officer, National Association of REALTORS®, said in a statement. “We applaud Representatives Moore and Yakym for advancing this commonsense, bipartisan solution that honors our nation’s military families while expanding pathways to homeownership.”

The bill is still in its early stages after just being introduced. Congress goes back into session in September, where representatives Moore and Yakym will take up the measure with fellow lawmakers.

“Both of us will seek co-sponsors when we go back into session, and because it’s a tax bill, it will go before the Ways and Means Committee of which both of us are members, and we’ll have a hearing,” Moore said. “And if we don’t get it through, I know in this next Congress, the 120th Congress, this matter will be top of mind.”