Legislation Would Make Homes More Affordable for 12 Million American Families
Washington, DC – Senator Gordon Smith (R-OR), joined by Senator Blanche Lincoln (D-AR) has introduced the Mortgage Insurance Fairness Act that will make mortgage insurance tax-deductible for the vast majority of American homeowners.
"Realizing the dream of homeownership is one of the greatest moments in a lifetime," Smith said. "It provides safety and stability not only to families but to entire communities."
Mortgage insurance, whether provided through the Veterans Administration, Fair Housing Act, Rural Housing Service, or private companies is paid by most home buyers when a down payment of less than 20% is made. While interest on mortgages is tax-deductible, insurance is not and often costs over $1000 annually. Smith's bill would make mortgage insurance deductible for those whose incomes do not exceed $106,000 per year – making approximately 90% of Americans eligible.
"Over 12 million American homeowners are going to benefit from this deduction in the first year alone," Smith said. "Even more importantly, it's going to make it easier for families in the future to buy their first home."
Smith's legislation will be of particular assistance to minority individuals and families as 57% of African-Americans and Hispanics who hold mortgages pay this insurance. In addition, 54% of loans made to borrowers with incomes below the median are covered by mortgage insurance. Estimates indicate that this deduction will help add 300,000 American families to the ranks of homeowners annually.
Smith introduced the Mortgage Insurance Fairness Act as part of a series of bills he is advocating to increase the number of homeowners throughout the United States. This most recent legislation is supported by a broad coalition including the National Urban League, National Taxpayers Union, National Education Association, Citizens Against Government Waste, National Conference of Black Mayors, and the National League of Cities.
Representatives Paul Ryan (R-WI) and William Jefferson (D-LA) have introduced similar legislation in the House of Represenatives.
