A bipartisan majority of the U.S. House of Representatives has agreed to co-sponsor a key tax provision already passed by the U.S. Senate that would give a much-needed financial boost to millions of current and future homeowners.
The Mortgage Insurance Fairness Act (H.R. 1336), introduced by Rep. Paul Ryan (R-Wis.) and Rep. William Jefferson (D-La.), would make private and government mortgage insurance tax deductible and save consumers hundreds of dollars annually by allowing a write-off of monthly mortgage insurance premiums.
The deduction is limited to individuals and families earning less than $100,000 per year and is part of an omnibus tax bill passed by the Senate in May. To date, 220 members of the House of Representatives from both sides of the aisle have co-sponsored the deductibility legislation.
“This bill, if passed, will go a long way to help homeowners and potential homeowners who simply want to own a piece of the American dream,” said Marc H. Morial, president and chief executive officer of the National Urban League. “I urge Congress to do what it needs to do to make the goal of affordable home ownership a reality for each and every American.”
Private mortgage insurance (PrivateMI) is a critical factor for low- and moderate-income families and minorities seeking to become homeowners. PrivateMI is a credit enhancement allowing borrowers to qualify for a mortgage with less than the traditional 20 percent down payment.
Recent figures show that, nationwide, mortgage insurance covered more than half of all mortgage purchase loans made to African American and Hispanic borrowers and 54 percent of loans to borrowers earning below the median household income for their area, according to a press statement.
Other groups supporting the proposal include the National League of Cities, Consumer Federation of America, Citizens Against Government Waste, National Education Association, Fraternal Order of Police, National Taxpayers Union, National Council of La Raza and the International Brotherhood of Teamsters.
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