Prospective homebuyers struggling to scrape together a down payment could get a little help from a tax deduction
under consideration in Congress.
The tax break would allow homeowners to deduct the cost of private mortgage insurance charged by banks and
lenders when the homebuyer cannot amass a down payment covering 20 percent of the purchase price.
Homeowners can already claim a tax deduction for mortgage interest paid during the year. Homeownership
advocates said the mortgage insurance benefit could help younger homebuyers and lower−income families afford
a home.
“For first−time homebuyers, getting that initial down payment is usually the single highest hurdle,” said Kurt
Pfotenhauer, a senior vice president with the Mortgage Bankers Association.
The Mortgage Insurance Companies of America, an association representing the private mortgage industry, said
more than 12 million people who pay mortgage insurance could be helped.
The tax benefit would cover 5.5 million people who pay private mortgage insurance and 7 million homeowners
with Federal Housing Administration loans. The benefit starts to shrink for families earning $100,000 or more.
Senate tax writers worked the tax break, worth an estimated $600 million to homeowners over the next decade,
into a bill reducing taxes on American manufacturers. It is one of a long list of minor tax programs designed to
attract more support for a package of corporate tax reductions.
Other items include:
A new category of tax−exempt bonds that could be used by nonprofit organizations to finance purchases
of forest lands.
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· A renewal of an expired tax deduction that allows teachers to recoup money spent on classroom supplies.
Steve Hoogenakker and his family, Teri Hoogenakker, Paul Hoogenakker, Kirsten Hoogenakker, and Gerrit Hoogenakker live in the Minneapolis area of Minnesota