Great News For Homebuyers: U.S. Congress Extends Mortgage Insurance Tax Deduction
WASHINGTON — U.S. Mortgage Insurers (USMI) President and Executive Director Lindsey Johnson issued the following statement on the federal budget deal passed by Congress and signed into law by President Trump today, which includes an extension of the tax deduction for mortgage insurance (MI) premiums.
“Mortgage insurance has helped millions of middle income Americans become homeowners and for nearly ten years, the tax deductibility of MI premiums has helped to reduce the cost of homeownership. In a bipartisan manner, our elected lawmakers in Congress demonstrated today their commitment toward helping low down payment first time homebuyers by keeping mortgage insurance tax deductible. This is important, because while many on Capitol Hill appreciate how MI protects the government and taxpayers from credit risk in the housing system, MI also directly benefits everyday workers.”
First available to taxpayers in 2007 and extended multiple times since then on a bipartisan basis, this tax deduction has been a successful tool in ensuring low- and moderate-income homebuyers have access to prudent and affordable low down payment mortgage finance. In 2015 alone, 4.1 million families benefitted from the MI premium tax deduction, for an average deduction of $1,528. The deduction is available to homeowners with MI who have an adjusted gross income under $100,000 and phases-out for adjusted gross incomes up to $110,000. USMI data show that more than half of purchase loans with private MI go to first-time homebuyers and more than 40 percent of borrowers with private MI have incomes below $75,000. The deduction expired at the end of 2016.
Over the past 60 years, private MI has helped more than 25 million families qualify for home financing by bridging the gap between a 20 percent down payment and perfect credit. In the past year alone, MI helped more than 850,000 families purchase or refinance homes.
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.