Author: Karl Howley

One Big Beautiful Bill Act Restores Mortgage Insurance Premium Tax Deduction, Delivering Tax Relief to Middle Class Homeowners

Posted on by Karl Howley

On average, qualified homeowners received a deduction of $2,364 in tax year 2021, the last year it was previously available

WASHINGTON — U.S. Mortgage Insurers, the association representing the nation’s leading private mortgage insurance (MI) companies, welcomes the inclusion of a provision to reinstate and make permanent the deductibility of MI premiums in the One Big Beautiful Bill Act that has now passed the House and Senate and is expected to soon be signed into law by President Trump. In doing so, Congress and the President return a deduction to taxpayers that will provide middle class homeowners with meaningful tax relief without increasing risk in the housing finance system.

Beginning in 2007, the tax code allowed qualified homeowners to deduct MI premiums paid to private MI companies and government agencies, including the Federal Housing Administration (FHA), U.S. Department of Veterans Affairs (VA), and U.S. Department of Agriculture’s (USDA) Rural Housing Service (RHS), from their federal income taxes. This deduction expired after tax year 2021.

During the time it was in effect:

  • The MI premium deduction was claimed 44 million times, representing a combined $65 billion in deductions for hardworking Americans.
  • 4 million homeowners claimed the deduction each year.
  • The average deduction amount was $1,454 per qualified taxpayer.

Previous efforts to reinstate the deduction were supported by lawmakers from both parties and chambers of Congress, as well as a broad coalition of industry groups, housing advocates, and civil rights organizations, as well as lawmakers from both parties and chambers of Congress. Past standalone bills to reinstate the deduction were championed by Sens. Thom Tillis (R-NC) and Maggie Hassan (D-NH), as well as Reps. Vern Buchanan (R-FL-16) and Jimmy Panetta (D-CA-19). More information about MI tax deductibility and USMI’s advocacy to restore the deduction can be found here.

“By restoring this tax deduction, Congress and the President are standing up for American homeowners, homebuyers, and taxpayers,” said Seth Appleton, President of U.S. Mortgage Insurers. “We welcome the inclusion of this deduction in the One Big Beautiful Bill Act and the tax relief it will deliver to millions of hard-working American homeowners with low down payment mortgages.”

USMI’s “2024 National Homeownership Market Survey” found that Americans see private MI as providing benefits including enabling borrowers to qualify for mortgage financing with a down payment as low as 3%, allowing access to homeownership and the ability to begin building equity sooner. Rather than waiting years to save for large down payments, private MI allows homebuyers to get off the sidelines sooner and is a small cost that has declined in recent years due to the 2017 Trump tax cuts and enhanced risk-based pricing. Allowing MI premiums to be deducted at parity with mortgage interest payments further reduces costs for eligible low down payment borrowers.

“Just as Congress has taken action to deliver tax relief to individual taxpayers and support middle class homeowners by reinstating and making permanent the MI premium deduction, the private MI industry serves as a strong, dedicated source of private capital that each and every day enables homeownership for American families and protects taxpayers writ large from the risks of future housing downturns,” said Appleton. “In fact, since the GSEs entered conservatorship, the private MI industry has covered nearly $60 billion in claims, shielding the GSEs and the taxpayers who stand behind them from significant financial losses.”

Recently released data from U.S. Mortgage Insurers show that the private MI industry helped more than 800,000 borrowers secure mortgage financing in 2024. First-time homebuyers who will now be able to claim the MI premium deduction represented approximately 65% of purchasers with private MI. In addition, the industry supported nearly $300 billion in mortgage originations in 2024, according to public filings, representing $300 billion worth of mortgage credit extended to borrowers for which Fannie Mae and Freddie Mac (the GSEs), taxpayers, lenders, and investors are protected from risk of loss.

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U.S. Mortgage Insurers (USMI) is dedicated to a housing finance system backed by private capital that enables access to affordable and sustainable housing finance for borrowers while protecting taxpayers. Mortgage insurance offers an effective way to make mortgage credit available to more people. USMI is ready to help build the future of homeownership. Learn more at www.usmi.org.

 

Press Release: Despite Market Challenges, Private Mortgage Insurers Helped More Than 800,000 Borrowers in 2024 Become Homeowners

Posted on by Karl Howley

Approximately 65% of purchasers that used private MI were first-time homebuyers

WASHINGTON — U.S. Mortgage Insurers, the association representing the nation’s leading private mortgage insurance (MI) companies, released its annual volume data for last year that show the industry helped more than 800,000 borrowers secure mortgage financing in 2024. Approximately 96% of these mortgages were new purchases, and first-time homebuyers represented approximately 65% of purchasers with private MI. In addition, the industry supported nearly $300 billion in mortgage originations in 2024, according to public filings. This represents $300 billion worth of mortgage credit extended to borrowers for which Fannie Mae and Freddie Mac (the GSEs), taxpayers, lenders, and investors are protected from risk of loss.

In 2024, the private MI market also served a large number of low- and moderate-income borrowers. Nearly 35% of those that purchased or refinanced a mortgage with private MI had annual incomes below $75,000, and the average loan amount with private MI was approximately $365,000, according to GSE data. The private MI industry has enabled nearly 40 million people to access affordable, low down payment mortgages in its 68-year history.

“At a time when nearly 80% of Americans believe owning a home is very important to them, despite challenges from interest rates and inventory, private MI continues to make the dream of homeownership possible for millions of people across the country that don’t have access to a 20% cash down payment,” said Seth Appleton, President of USMI.

USMI’s “2024 National Homeownership Market Survey” found that the ability to afford a down payment ranks as the top challenge to buying a home. The survey further found that Americans see private MI as providing benefits including enabling borrowers to qualify for mortgage financing with a down payment as low as 3%, and allowing them to access homeownership and the ability to begin building equity sooner. Rather than waiting years to save for large down payments, private MI allows homebuyers to get off the sidelines quicker and is a small cost that has declined in recent years due to the Trump tax cuts and enhanced risk-based pricing.

By design, private MI serves as the first layer of private capital protecting the housing system against default risk, protecting more than $1.4 trillion in GSE mortgages and shielding taxpayers from risk. The industry has significantly expanded its role as a “second pair of eyes” during mortgage underwriting and post-close processes to serve as a check on fraud and credit quality. In addition, the strength and resiliency of private MI has been reinforced by safeguards and requirements that have been revised and refined over the years, including the Private Mortgage Insurer Eligibility Requirements (PMIERs), which set robust, granular requirements for insuring loans acquired by the GSEs.

“Since the GSEs entered conservatorship, the private MI industry has covered nearly $60 billion in claims, shielding the GSEs and the taxpayers who stand behind them from significant financial losses,” said Appleton. “A strong, dedicated source of private capital that protects taxpayers from the risks of future housing downturns and also works for homebuyers is truly a win-win.”

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U.S. Mortgage Insurers (USMI) is dedicated to a housing finance system backed by private capital that enables access to affordable and sustainable housing finance for borrowers while protecting taxpayers. Mortgage insurance offers an effective way to make mortgage credit available to more people. USMI is ready to help build the future of homeownership. Learn more at www.usmi.org.

 

Statement: USMI on the Confirmation of Bill Pulte as FHFA Director

Posted on by Karl Howley

WASHINGTON—Seth Appleton, President of U.S. Mortgage Insurers (USMI), released the following statement on today’s Senate confirmation of Bill Pulte as Federal Housing Finance Agency (FHFA) Director by a bipartisan vote of 56 to 43:  

“USMI congratulates Director Pulte on his Senate confirmation to lead FHFA and oversee critical financial institutions that facilitate more than $8 trillion in funding for the U.S. housing market. The private mortgage insurance industry has long worked with FHFA, Fannie Mae and Freddie Mac (the GSEs), the Federal Home Loan Banks, and other housing finance stakeholders to reduce barriers to homeownership and ensure access to affordable and sustainable mortgage credit backed by private capital. In fact, private mortgage insurance has helped nearly 40 million low down payment borrowers become homeowners, $1.4 trillion in GSE mortgages currently outstanding have protection from MI coverage, and private mortgage insurers have paid nearly $60 billion in claims since the GSEs entered conservatorship. USMI strongly agrees with Director Pulte’s statement in his nomination hearing that taking risk away from the taxpayers and giving it to the private market is a win and USMI and its members look forward to working with Director Pulte and his team at FHFA to accomplish that goal while also prudently ensuring access to sustainable mortgage credit for first-time homebuyers.” 

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U.S. Mortgage Insurers (USMI) is dedicated to a housing finance system backed by private capital that enables access to housing finance for borrowers while protecting taxpayers. Mortgage insurance offers an effective way to make mortgage credit available to more people. USMI is ready to help build the future of homeownership. Learn more at www.usmi.org. 

Op-Ed: Despite headwinds, homeownership remains important in Missouri and across U.S.

Posted on by Karl Howley

USMI President Seth Appleton authored an opinion piece in the Springfield News-Leader on the greatest challenges that future homebuyers face in his home state using data from USMI’s 2024 National Homeownership Survey. In the piece, he explains how thousands have been able to purchase with low down payment mortgages using private MI and calls for the renewal of a tax deduction that more than 14,000 Missourians claimed in 2021 before the deduction expired. “For 15 years, millions of homeowners relied on this deduction to offset some of the costs of homeownership. There aren’t that many no-brainers in Washington, D.C. This, however, is one of them,” said Appleton. Read the full piece here.