Specifically, H.R. 1213 includes the modifications to the mortgage interest deduction proposed by National Low Income Housing Coalition (NLIHC). The measure would lower the cap on mortgage interest for which a household can get a tax break from $1 million plus $100,000 in home equity loans to $500,000, and would convert the deduction to a 15% non-refundable credit.
These two changes to the mortgage interest deduction would result in approximately $197 billion in savings over ten years. The measure would expand the benefits of the mortgage interest tax break to an additional 16 million Americans, 99% of whom have incomes under $100,000. The bill calls for these modifications to be phased in over five years.
H.R. 1213 would apply the majority of these savings, estimated by Mr. Ellison’s office to be approximately $109 billion over 10 years, to the NHTF. The measure would also apply a portion of the savings to the Low Income Housing Tax Credit, the Section 8 tenant-based and project-based rental assistance programs, and the Public Housing Capital Fund.
The bill has been referred to the House Committees on Ways and Means and Financial Services. Representative Bobby Scott (D-VA) is the original co-sponsor.
NLIHC has endorsed H.R. 1213 and urges its members to contact their congressional Representatives and ask them to cosponsor the measure.
New Jersey housing advocates participating in the NLIHC Lobby Day on March 20, 2013, will be discussing the importance of this legislation with their Congressional offices.
In other NHTF news, the Senate’s non-binding budget resolution includes a deficit-neutral reserve fund to assist working families that allows, in part, funding for the National Housing Trust Fund.