The heated disagreement between administration housing and Treasury officials over using tax-exempt bonds to finance single-family residences is expected to wind up on President Carter's desk, according to Donald H. Haider, deputy assistant Treasury secretary for state and local finance.
Speaking yesterday at a conference on bonds sponsored by the Bureau of National Affairs, Haider said the Treasury favors eliminating all state and local bond issues for single-family housing. Continued expansion of such offerings would mean a projected $2.3 billion revenue loss by 1984, he said.
Haider also indicated the administration might use revenue sharing as a way of gently persuading cities and localities to discontinue their offerings.
"Do you mean revenue sharing would be held hostage to mortgage bonds?" Haider was asked. He laughed and replied, "Let's just say it's a good way to get the attention of state and local officials."
Housing and Urban Development Secretary Patricia Harris favors the concept, however, provided the mortgage funds generated by the bonds are targeted toward low-income persons and designated depressed areas.
States have been selling tax-exempt bonds to finance mainly-multi-family housing for years, but cities and counties entered the game just last June by floating bond issues to finance single family homes. An estimated $600 million in such bonds was sold last year; this year's estimate for all single-family housing bonds ranges up to $5 billion, a figure Haider admits is conservative.
This month, for example, 38 percent of the funds raised in all state bond issues went for housing, about two-thirds of which was single-family. That is double January's 19 percent.
The primary attraction of these bonds is that they enable mortgage funds to be lent at about two percentage points below current market levels and therefore theoretically help to hold down the cost of housing. The biggest objection thus far is that they have helped homeowners who do not need help.
A Congressional Budget Office study of 18 city and county single-family residential mortgage bond issues shows that seven localities permit loans to households with incomes as high as $50,000. Another four limit the income to $40,000, and three have no limits at all. One city will makr mortgages up to $100,000, and eight put no limit on the amount of mortgage money made available.
In the private sector, the question of tax-empts for individual housing has pitted savings and loan associations, the traditional source of home financing, against investment bankers, who consider these bonds an attractive security and who are eagerly proposing their services to counties and cities in exchange for 2 percent of the revenues.
S & Ls claim the concept is not in the public interest and are worried that bond mortgage financing will endanger their profits and, perhaps, even their eventual existence as housing specialists.
A number of suggestions were offered yesterday to help resolve the controversy. W. James Lopp, an executive vice president of E. F. Hutton -- which last year underwrote the first single-family bond issue by the city of Chicago -- proposed that mortgage preference be given to first-time buyers.
The Congressional Budget Office's options include targeting loans to low-income and moderate-income familes, and to higher-income families who revitalize blighted areas, allowing only legislatively established state or local housing authorities to issue bonds, and, finally, requiring persons to choose between tax exemption and mortgage deduction. CAPTION:
Picture, W. JAMES LOPP... proposed preference