United For HomesThe United for Homes campaign proposes funding the National Housing Trust Fund with revenue raised from modifications to the mortgage interest deduction. Targeting mortgage interest tax breaks more towards middle class and lower income homeowners will provide a tax benefit where it is needed most and create revenue that can be used to help end homelessness.

THE CURRENT LAW

The mortgage interest tax deduction is a part of the tax code that allows some homeowners to deduct a portion of the interest they pay on their mortgage from their taxable income. Under current law, homeowners who itemize on their tax returns can deduct the interest paid on mortgages on first and second homes up to a total of $1 million, and the interest on up to an additional $100,000 in home equity loans.

OUR PROPOSAL

The National Low Income Housing Coalition and United for Homes campaign propose to modify the current mortgage interest tax break by reducing the size of a mortgage eligible for a tax break to $500,000, and to convert the deduction to a 15% non-refundable tax credit. The revenue generated from these savings would be used to fund the National Housing Trust Fund.Tax Deduction vs. Tax CreditTax deductions are subtracted from a taxpayer's total income in order to calculate taxable income. Tax credits, on the other hand, are subtracted directly from a taxpayer's tax bill. Tax credits result in a dollar-for-dollar reduction in the amount of tax a taxpayer owes. Tax credits can be more beneficial to taxpayers than tax deductions, especially to those who do not itemize on tax returns.

THE RESULTS

Almost 15 million more homeowners would get a tax breakOnly 20% of all taxpayers claim the MID. By converting to a credit, all homeowners with mortgages would get a tax break, not just those who have enough income to file itemized tax returns. Through our proposed housing tax reform, the number of tax payers with mortgages who would get a tax break would increase from 33.7 to 48.4 million. Source: Tax Policy Center (2015). Help for more middle and lower income homeownersOur housing tax reform proposal is designed so the vast majority of homeowners with incomes less than $150,000 a year who are impacted by the proposal would experience a tax cut. Source: NLIHC tabulations of Tax Policy Center data (2015).

Americans want a more fair tax code, and to end homelessnessAccording to a national poll, 60% of Americans favor the United for Homes housing tax reform proposal. Seventy-six percent of Americans favor building more affordable housing in their states to help end homelessness. Source: NLIHC poll conducted by Belden Russonello Strategists LLC (2013).

New revenue for affordable housingThe Joint Committee on Taxation estimates the MID will cost $77 billion in 2016. But with our housing tax reform proposal, there will be $213 billion over ten years in new revenue that can be used to address our most important housing problems by funding the National Housing Trust Fund. Source: NLIHC tabulations of Tax Policy Center data (2015).

LEARN MORE ABOUT THE MID

Mortgage Interest Deduction: Frequently Asked Questions (PDF)Everything advocates need to know about the MID and our housing tax reform proposal

2015 Survey Among Voters in CT, NJ, NY, and OR

Statewide polls in four states show broad support for increased federal funding for affordable housing to help end homelessness. Voters in Connecticut, New Jersey, New York, and Oregon also support modest changes to the mortgage interest deduction (MID) and rank ending homelessness over reducing taxes when asked how to spend revenue gained from MID reform. The polls were done for NLIHC by Belden Russonello Strategists (BRS) and Mason-Dixon Polling and Research. 

2013 National Public Opinion Survey

NLIHC commissioned another national public opinion survey exploring the public's attitudes toward homelessness and changing mortgage interest tax laws. The survey was conducted by Belden Russonello Strategists LLC between February 27 and March 9, 2013.

2012 National Public Opinion Survey

NLIHC commissioned a national public opinion survey exploring the public's attitudes toward the mortgage interest deduction, possible housing finance system reforms and programs to assist low income individuals to obtain housing. The survey was conducted by Belden Russonello Strategists LLC in August 2012.