NAR Opposes Mortgage Interest Deduction Provision on Obama's Budget Proposal

February 1, 2010 - President Obama released his budget proposal this afternoon. The Administration’s FY 2011 budget has again recommended, as did the FY 2010 budget, that the value of the mortgage interest deduction for upper income taxpayers be limited to the 28% bracket.  NAR is 100% opposed to the provision that modifies the Mortgage Interest Deduction and is prepared to use its formidable array of resources against its enactment.

As currently drafted, the plan changes the Mortgage Interest Deduction by reducing the amount of mortgage deductibility on families earning over $250,000 (AGI), and on single tax payers earning over $200,000 (AGI). This proposed change in the Mortgage Interest Deduction will result in further erosion of home prices and home values. 

As it did in 2009, NAR will launch a multiphase plan of action to eliminate this provision from the budget plan. NAR has already sent letters to Members of the House of Representatives and the Senate.

Most members of Congress have also opposed the proposal. Before 2009, limits on itemized deductions had not been part of the legislative agenda. Note, however, that in August 2009, the Congressional Budget Office (CBO)  released its annual report identifying possible revenue sources. The CBO report is NOT legislation; it is more like an academic exercise to explore options. A brief description of the current CBO proposals is attached.

Brief Description of the 2009 Congressional Budget Office (CBO) Recommendations> (PDF: 168K)

View Section of the 2009 Budget Proposal Modifying the Mortgage Interest Deduction> (PDF: 150K)

March 2009 Issue of the Eye on the Hill Newsletter>

2009 NAR's Letter to President Obama on the Mortgage Interest Deduction Provision> (PDF: 130K)

NAR's Issue Summary: Mortgage Interest Deduction>

Advocacy History: Defending the Mortgage Interest Deduction>