The National Low Income Housing Coalition suggests modifying the 100+ year-old mortgage interest deduction (MID), and instead of eliminating it, cut the maximum mortgage amount that can have interest deducted from it from $1 million to $500,000 and use the savings to support affordable housing, especially for the homeless. Rep. Dave Camp, R-Mich., powerful chairman of the House Ways and Means Committee, would reduce income taxes with the money saved, reports nationalmortgagenews.com. The Coalition’s president, Sheila Crowley, who says the MID is “inefficient, regressive, and expensive,” says it should become a tax credit given to all homeowners, and would especially benefit those earning $100,000 or less and raise taxes on those making over $250,000.

The National Association of Realtors (NAR) and the National Association of Home Builders (NAHB) reject modifying the MID hands down, taking a“do not touch!” approach. Al Dellibovi, long time president of the Federal Home Loan Bank of New York wrote in Realtor Magazine,”There are those who would have you believe the mortgage interest deduction benefits only upper-income taxpayers, but that is simply not true.” He cites a 2013 Hudson Institute study that reports the greatest deduction benefits the middle class, over half of the deduction claimed by those making $75,000 to $200,000.

Crowley says the money saved would equal $230 billion over ten years without increasing the federal deficit, and would fund the National Housing Trust Fund, an entity authorized by Congress in 2008 as part of the Housing and Economic Recovery Act, but never funded. As MHProNews understands, the monies would expand and reserve affordable rental housing for low-income families and eventually end homelessness. Crowley acknowledges H.R. 1213, sponsored by Rep. Keith Ellison, (D-MN,) and which contains the Coalition’s proposal, has no chance of passing in this Congress, but may be part of a comprehensive tax package next year. Commentator Mark Fogarty “fears Congress will still be kicking tax reform around when the mortgage interest deduction reaches its bicentennial, in 2113.” ##

(Photo credit: Gary Pickering/rollerpodblogspot.com–survival shelter)