NLIHC Releases New Report on the Benefits of Reforming the Mortgage Interest Deduction to Address Homelessness and Housing Poverty

Washington, DC - The National Low Income Housing Coalition (NLIHC) released the “Reforming the Mortgage Interest Deduction: How Tax Reform Can Help End Homelessness and Housing Poverty” report today calling for Congress and the Trump administration to use mortgage interest deduction (MID) reform to end homelessness and housing poverty in America.

The report identifies solutions to the homelessness and affordable housing crisis in America that would incur no additional cost to the federal government, those proposed by the NLIHC-led United for Homes (UFH) campaign. The report and UFH campaign call for modest reforms to the mortgage interest deduction (MID)—a $70 billion tax write-off that primarily benefits higher income households—and for reinvesting the billions in savings in affordable housing for the lowest income families with the greatest needs.

While federal investments in affordable rental housing at the U.S. Departments of Housing and Urban Development (HUD) and Agriculture (USDA) have lifted millions of families out of poverty, proven programs at the agencies are sorely underfunded. Only a quarter of families who qualify for housing assistance receive it.

The report shows that each year the federal government spends almost $200 billion to help Americans buy and rent their homes.  Seventy-five percent of these resources goes to subsidize higher income homeowners through the MID and other homeownership tax breaks. In fact, the federal government spends more to help the 7 million households with incomes above $200,000 than to help the 55 million households with incomes below $50,000, even though they are far more likely to struggle to afford a place to live.

Many experts from across the ideological spectrum point out that the MID is a poorly targeted and wasteful use of federal resources that encourage households to take on higher levels of debt, fails to promote homeownership, disrupts the housing market by inflating housing costs, and mostly benefits higher income households who do not need federal assistance to live in stable homes. Many economists have called for eliminating the MID altogether.

The report and United for Homes instead call for modest reforms to the MID: lowering the amount of mortgage against which a tax break can be claimed from $1 million to $500,000 and converting the deduction to a 15% non-refundable tax credit. The report shows that such changes would provide a tax break to 25 million lower income homeowners and would generate $241 billion over 10 years to be reinvested to support affordable housing for those with the greatest needs through the national Housing Trust Fund and rental assistance programs. 

“With the current shortage of over 7 million rental homes affordable and available for extremely low income households, the affordable housing crisis in America must be addressed,” said Diane Yentel, president and CEO of NLIHC. “Congress and the administration must act now to rebalance federal housing policy and reinvest the savings from MID reform into affordable housing programs for those with the greatest needs. Smart reforms and investments can end homelessness and housing poverty in America and provide all households the opportunity to achieve successful, healthy lives.”

Visit: to read the full report.

Visit: to learn more about United for Homes.


Established in 1974 by Cushing N. Dolbeare, the National Low Income Housing Coalition is dedicated solely to achieving socially just public policy that assures people with the lowest incomes in the United States have affordable and decent homes.