A new NLIHC analysis of Home Mortgage Disclosure Act (HMDA) data finds that only 4.6% of mortgages issued nationwide between 2011 and 2013 were larger than $500,000. The United for Homes Campaign proposes lowering the portion of a mortgage for which the interest can be deducted from $1 million to $500,000.
State maps illustrating the percentage of mortgages issued for more than $500,000, by county, are at http://nlihc.org/unitedforhomes/mortgage-maps. In almost 95% of counties, these mortgages accounted for fewer than 3% of all mortgages issued. The HMDA analysis covers both government-insured and conventional loans for home purchase or refinancing, and is restricted to owner-occupied properties that are one-to-four family or manufactured housing secured with a first lien.
The United for Homes Campaign proposal would also convert mortgage interest deduction to a 15% non-refundable tax credit. People who borrow more than $500,000 would still receive a tax credit on the first $500,000 of the mortgage. This reform would provide a tax break to 16 million additional homeowners who currently do not itemize deductions for their tax returns.
The reform would also create almost $230 billion of additional revenue over ten years that the campaign proposes be dedicated funding for the National Housing Trust Fund.