Washington, DC – July 29, 2010 – (RealEstateRama) — Today, during a hearing of the House Financial Services Committee, Congresswoman Suzanne Kosmas (FL-24) called for action to stabilize the commercial real estate market in order to help small businesses grow and create jobs. At the hearing, entitled ‘Alternatives for Promoting Liquidity in the Commercial Real Estate Markets, Supporting Small Businesses and Increasing Job Growth,’ Kosmas addressed the need to help small businesses who are facing a lack of available credit and are being denied the ability to renew the commercial real estate loans that are critical to their operations.
Last week, Kosmas and a bipartisan group of her colleagues introduced legislation (H.R. 5816) to stabilize the commercial real estate (CRE) market by creating a temporary Treasury-run program to guarantee CRE investments. The bipartisan legislation will improve the health of small and mid-sized banking sectors, mitigate bank closures, and support Central Florida’s small businesses that rely on commercial real estate loans.
“Many Central Florida businesses are having their long-standing commercial loans called due because of a lack of liquidity in the system,” said Suzanne Kosmas. “Since entering Congress, I have been focused on finding ways to prevent another financial and economic crisis like the one that has strained our local economy. Our bipartisan, fiscally responsible legislation will help stabilize the commercial real estate market and ensure that small businesses across Central Florida can access the credit they need to grow and create jobs.”
Kosmas’ legislation creates a three year Treasury-run program that would provide up to $25 billion in guarantees for commercial real estate investments. Fifty percent of the program’s capacity will be reserved for banks with under $10 billion in assets and the remainder will be accessible by larger institutions and mortgage bankers. The fiscally responsible plan calls for a 2 percentage point fee to cover the cost of the program.
A board of federal regulators, the Treasury Department and industry experts would set guidelines for the types of loans that could take part in the program. To qualify for the federal backing, the bond would have to carry an investment-grade rating and each underlying loan in the security would have to be for $10 million or less.
As a former small business owner, Suzanne Kosmas is focused on supporting small businesses so they can continue creating jobs and investing in our communities. She has introduced or sponsored numerous bills to provide tax relief to small businesses, to cut taxes for entrepreneurs, and to support small business incubator programs.