CHLA Calls on Congress to Restore Homeownership Tax Incentives – 12/06/17

CHLA Calls on Congress to Make Changes to Restore Homeownership Tax Incentives – Releases More Details on CHLA’s Mortgage Credit Proposal

Contact: Scott Olson                                                    For Immediate Release

        571-527-2601                                                           December 6, 2017


As the House and Senate conference their respective tax bills, the Community Home Lenders Association (CHLA) is calling on Congress to make changes to address concerns that treatment of deductions in the pending tax bills could result in fewer than 10% of homeowners using the mortgage interest deduction – which in turn could depress homeownership tax incentives and thereby reduce the homeownership rate and housing values.

“The Community Home Lenders Association continues to have concerns about the significant loss of homeownership tax incentives under the tax bills – and renews our call to restore them through CHLA’s targeted Mortgage Credit Proposal or some similar approach,” said Scott Olson, Executive Director of the CHLA.

CHLA today released more details on its Mortgage Credit Proposal, which it believes:

* Would provide home purchase tax incentives for over 90% of homeowners that would lose the use of the mortgage interest deduction under the House and Senate tax bills,

* Would create a net tax decrease for over 90% of taxpayers who would otherwise experience a tax increase under the House and Senate bills,

* Is carefully targeted to avoid windfalls and reduce the incremental cost of the proposal, in order to make it easier to pay for these changes.


“We urge tax conferees to adopt CHLA’s targeted mortgage credit proposal and fund it with an increase in the corporate tax rate up to 22%, as the President signaled he would be open to,” said Scott Olson, Executive Director of the CHLA.

A one page summary of CHLA’s proposal is enclosed – with the key components being:

  • 15 % non-refundable tax credit for the amount of combined qualified mortgage interest, property taxes, and charitable deductions that exceed $13,00 [$6,500 for individuals].


[Option: although more complex and costly, the proposal could be modified to allow a 22% and a 24% tax credit for taxpayers in those respective tax brackets]


Qualified expenses include:

 (a)  Mortgage interest on up to $750,000 in combined mortgages on 1st and 2nd homes

(b)  Up to $10,000 in property taxes on 1st and 2nd homes

(c)   Up to $10,000 in qualified charitable deductions

(d)  Up to $10,000 in state and local income taxes (note: no credit is allowed on these taxes directly, but they   may be used to meet the 13,000/$6,500 threshold)


·      Credit only available for taxpayers that use the standard deduction [no double dipping]

·      IF the conference report eliminates the AMT, the credit phases out by 2 % for each $1,000 of AGI over a certain threshold (e.g. $250,000 for couples, $125,000 for individuals) – in order to mimic the current tax

·      Provisions sunset whenever individual tax changes sunset (e.g., 2026 if Senate bill].



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