Trade groups like the Mortgage Bankers Association (MBA) may be getting at least some of the relief they’ve been advocating for when it comes to mortgage insurance premiums.
Last week, H.R. 2760 — otherwise known as the Middle Class Mortgage Insurance Premium Act — was introduced into the House of Representatives by Rep. Vern Buchanan (R-Fla.). The bill has 10 co-sponsors, including three Republicans and seven Democrats.
The bill was referred to the House Committee on Ways and Means. While the full text of the legislation is not yet available, its listed purpose is to “amend the Internal Revenue Code of 1986 to increase the income cap for and make permanent the mortgage insurance premium deduction.”
“With housing prices skyrocketing in Florida and across the country, it’s our responsibility to provide tax relief for middle-class families seeking to own a home,” Buchanan, the vice chairman of the ways and means committee, said in a statement. “My bipartisan legislation will help make the American Dream of home ownership real for millions of Americans.”
“The costs of mortgage insurance can make buying a home that much more difficult for working families,” said Jimmy Panetta (D-Calif), a co-sponsor. “Our bill would make the mortgage insurance premium tax deduction permanent and update the income threshold so more middle-class homeowners can benefit.
“Despite today’s challenging housing market, this type of fix to modernize this tax provision would help more Americans achieve and sustain home ownership.”
The MBA has been a vocal advocate for any moves to reduce mortgage insurance premiums — especially for Federal Housing Administration (FHA) loans.
The Trump administration issued a day-one executive order that called upon the heads of all executive departments and agencies “to deliver emergency price relief, consistent with applicable law, to the American people” in an effort to improve the nation’s housing supply and affordability challenges. The MBA followed by renewing its efforts to seek reductions in mortgage insurance premiums.
“The general deregulatory bent of the new administration, we think, will be very helpful in bringing down some costs in the origination process. Over the next months and years of this administration, we expect an easing of the regulatory burden,” Bob Broeksmit, the MBA’s president and CEO, said on a recent episode of the HousingWire Daily podcast.
“Even more immediately, though, we believe the administration could very quickly make good on this pledge, this commitment to lower costs in housing, by taking 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,” he added.
Seth Appleton, the president of the U.S. Mortgage Insurers (USMI), said that his organization “strongly supports” H.R. 2760. In a statement, he called it “common-sense legislation that would restore, make permanent, and expand eligibility for the tax deduction for mortgage insurance (MI) premiums.”
“From 2007 until its expiration in tax year 2021, the MI premium deduction was claimed 44.5 million times, representing a combined $64.7 billion in deductions for hardworking homeowners — an average annual deduction of $1,454 per qualified taxpayer,” Appleton said.
“Unfortunately, its expiration has deprived millions of low- and moderate-income taxpayers from benefitting from this deduction in recent years. The Middle Class Mortgage Insurance Premium Act is a positive step towards putting money back in the pockets of taxpayers and making homeownership more affordable for American families.”
English