AgentIndustry News

Should the mortgage interest deduction cap be lowered?

National Low Income Housing Coalition's Robin Hood-esque proposal would lower cap for mortgages higher than $500,000 to subsidize federal programs for low-income borrowers
  • The National Low Income Housing Coalition (NLIHC) is suggesting that changes be made to the current mortgage interest deductions for people whose mortgages exceed $500,000.
  • The rationale for this proposal is that mortgages higher than $500,000 are rare in the United States and even rarer for minority borrowers.
  • The proposal would alter mortgage interest tax deductions and the portion of a mortgage eligible for tax breaks.

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The National Low Income Housing Coalition (NLIHC) is on a mission to give low-income people better access to affordable and decent homes, and you might say that the housing advocacy group is taking a Robin Hood approach toward achieving that goal. The group is suggesting that changes be made to the current mortgage interest deductions for people whose mortgages exceed $500,000, with the additional funds generated going to federal housing programs that benefit the lowest income households in America. The NLIHC’s rationale for this proposal is that mortgages higher than $500,000 are rare in the United States. Analyzing Home Mortgage Disclosure Act (HMDA) data from the past three years, the group says that only 5 percent of mortgages obtained in 2012, 2013 and 2014 were larger than $500,000 -- and mortgages higher than $500,000 are geographically concentrated to 10 states, with California alone accounting for more than 45 percent of the national total. In addition, the...