Federal tax policy can provide strong financial incentives for individuals and families to make the investment in homeownership. Numerous studies have shown the many benefits of homeownership to both the individual and community, such as higher net worth, lower crime rates and improved educational testing scores. Homeowners have long been able to deduct mortgage interest payments, offering significant tax incentives toward homeownership. Providing the ability to deduct mortgage insurance (MI) payments furthers the use of these important credit enhancements and further reduces the effective cost of homeownership.
On December 20, 2007 President Bush signed H.R. 3648, the "Mortgage Forgiveness Relief Act of 2007." Among other provisions, the legislation provided a three-year extension of the mortgage insurance tax deduction. MBA believes that this tax deduction is a significant benefit to prospective homebuyers, and will work to help make this benefit as understandable and accessible as possible.