Last week, the Middle Class Mortgage Insurance Premium Act, known as H.R. 2760, was introduced into the House of Representatives by Rep. Vern Buchanan (R-Fla.). The bill aims to address the growing concern around the high costs of mortgage insurance premiums, which have been a significant challenge for many middle-class families trying to purchase homes.
The bill has gained support from a bipartisan group of lawmakers, with 10 co-sponsors—three Republicans and seven Democrats. The legislation seeks to amend the Internal Revenue Code of 1986 to both increase the income cap and make the mortgage insurance premium deduction permanent.
H.R. 2760: Providing Tax Relief and Reducing Mortgage Insurance Costs for Homebuyers
The primary goal of H.R. 2760 is to alleviate some of the financial burdens placed on homeowners by mortgage insurance premiums, particularly for those who qualify for Federal Housing Administration (FHA) loans.
The bill is expected to help more middle-class families access tax relief by making the mortgage insurance premium tax deduction a permanent fixture and raising the income thresholds for eligibility. This initiative is seen as a response to the increasing cost of homeownership, which has become a pressing issue, particularly in states like Florida, where housing prices have soared.
New Bipartisan Bill Seeks to Permanently Cut Mortgage Insurance Costs and Expand Tax Relief for Homebuyers
Rep. Buchanan, who introduced the bill, expressed the importance of providing tax relief for middle-class families struggling with high housing costs. He emphasized that this legislation would help make homeownership more attainable for Americans, especially in the face of skyrocketing housing prices.
Rep. Jimmy Panetta (D-Calif.), a co-sponsor of the bill, echoed these sentiments, highlighting that the bill would make the mortgage insurance premium tax deduction permanent and update income thresholds. This, he argued, would allow more middle-class homeowners to benefit from the relief, helping them achieve and maintain homeownership despite a challenging housing market.
Industry Support for H.R. 2760: Advocating for Reduced Mortgage Insurance Premiums and Tax Relief
Trade organizations, such as the Mortgage Bankers Association (MBA), have long been advocating for lower mortgage insurance premiums. The MBA has been vocal in pushing for reductions in premiums, especially for FHA loans. Following the Trump administration’s executive order aimed at delivering emergency price relief and improving housing affordability, the MBA renewed its efforts to address the costs associated with mortgage insurance.
Bob Broeksmit, the MBA president, expressed hope that the new administration would ease regulatory burdens, particularly concerning mortgage insurance premiums, which could quickly alleviate costs for both single-family and multifamily housing.
The U.S. Mortgage Insurers (USMI) also strongly support H.R. 2760. Seth Appleton, the president of USMI, described the legislation as “common-sense” and emphasized that making the mortgage insurance premium tax deduction permanent would benefit millions of low- and moderate-income taxpayers.
Prior to its expiration in 2021, the mortgage insurance premium deduction was claimed 44.5 million times, amounting to $64.7 billion in total deductions. Appleton pointed out that the expiration of this provision has deprived many hardworking homeowners of a valuable benefit, and the Middle Class Mortgage Insurance Premium Act represents a step forward in making homeownership more affordable for American families.
