Rep. Vern Buchanan (R-Fla.) presented H.R. 2760, also referred to as the Middle Class Mortgage Insurance Premium Act, into the House of Representatives last week. Three Republicans and seven Democrats are among the ten co-sponsors of the bill.
The House Ways and Means Committee was tasked with reviewing the bill. The legislation's stated goal is to "amend the Internal Revenue Code of 1986 to increase the income cap for and make permanent the mortgage insurance premium deduction," albeit the complete text is not yet accessible.
According to a statement from Buchanan, the vice chairman of the ways and means committee, "it is our duty to provide tax relief for middle-class families who want to own a home, given the skyrocketing housing prices in Florida and throughout the nation." "Millions of Americans will be able to realize the American Dream of home ownership thanks to my bipartisan legislation."
Co-sponsor Jimmy Panetta (D-Calif) stated, "The expenses of mortgage insurance can make purchasing a home that much more difficult for working families." "To help more middle-class homeowners, our plan would update the income threshold and permanently extend the tax deduction for mortgage insurance premiums.
"This kind of update to modernize this tax provision would help more Americans attain and maintain home ownership, even in the face of today's difficult housing market."
The MBA has been an outspoken supporter of any efforts to lower mortgage insurance rates, particularly for loans from the Federal Housing Administration (FHA).
In an attempt to address the country's housing supply and affordability issues, the Trump administration issued an executive order on the first day in office directing the heads of all executive departments and agencies "to deliver emergency price relief, consistent with applicable law, to the American people." After that, the MBA redoubled its efforts to lower mortgage insurance premiums.
We believe that the incoming administration's overall deregulation stance will be highly beneficial in lowering some of the origination process's expenses. On a recent episode of the HousingWire Daily podcast, Bob Broeksmit, president and CEO of the MBA, stated, "We anticipate an easing of the regulatory burden over the next months and years of this administration."
"But even more immediately, we think the administration could take a very serious look at the mortgage insurance premium for FHA loans, both on the single-family side and the multifamily side for affordable apartments and affordable rentals, and very quickly make good on this pledge, this commitment to lower housing costs," he continued.
The U.S. Mortgage Insurers (USMI) "strongly supports" H.R. 2760, according to Seth Appleton, the organization's president. In a statement, he described it as "common-sense legislation that would expand eligibility for the tax deduction for mortgage insurance (MI) premiums and restore, make permanent."
"The MI premium deduction was claimed 44.5 million times between 2007 and its expiration in tax year 2021, totaling $64.7 billion in deductions for diligent homeowners — an average of $1,454 per qualified taxpayer per year," Appleton stated.
Unfortunately, millions of taxpayers with low and moderate incomes have been unable to take advantage of this deduction in recent years due to its expiration. A step in the right direction toward restoring taxpayers' incomes and lowering the cost of homeownership for American families is the Middle Class Mortgage Insurance Premium Act.
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