NAHB’s Effort on Preserving the Mortgage Interest Deduction

As you have heard, the National Commission on Fiscal Responsibility and Reform has released its final report recommending a number of significant changes to federal spending, entitlements and the tax code.  This report will serve as a starting point for congressional discussions on tax reform next year, and therefore, the recommendations it contains should be taken very seriously.

The overall proposal would eliminate nearly every tax break, with the revenue from this being used to lower marginal tax rates and reduce the deficit.  However, the plan does recommend retaining a few targeted provisions to promote jobs, homeownership, health care, charity, and savings.

While the lower marginal tax rates may look appealing, the devil is in the details.  The proposal shows that taxes would increase across the board for all Americans at all income levels; in fact, the highest percentage increase would fall on those in the lower-income range.

The plan would convert the mortgage interest deduction into a 12% non-refundable tax credit available to all taxpayers, not just those who itemize. The current $1 million mortgage cap would be lowered to $500,000.  No deduction/credit would be permitted for second homes, home equity or state and local taxes.  Further, the capital gains exclusion on the first $500,000 of gain on a home sale, as well as the Low Income Housing Tax Credit, would be eliminated.

New Website a Key Resource to Engage Consumers and Media

NAHB has launched a new website at SaveMyMortgageInterestDeduction that provides NAHB members and consumers with up-to-date information on the threat to the mortgage deduction and engages the public in defense of this cornerstone of American housing policy. The site debunks the myths about the deduction and contains fact sheets, frequently asked questions, press releases, media stories, statistics, reports, and more. Most importantly, SaveMyMortgageInterestDeduction tells visitors how to stay informed and make sure their opinions are heard on this crucial issue by connecting to NAHB’s Facebook and  Twitter social networking communities and our Eye on Housing Blog.

I strongly encourage you, your family, friends and business associates to visit the website, join in the discussion on and, and spread the word about what this proposal would mean to consumers, communities, and the overall housing industry.

Going Forward

We anticipate that debate on this issue will begin in earnest when the new Congress convenes in January, and at that time we will be reaching out to you, our members, for your help in our grassroots efforts to defend the mortgage interest deduction and respond to the other housing-related proposals in this report.

Of course, the impact of the proposals in the commission’s report extends far beyond the mortgage interest deduction and the consumer per se. Everyone in our industry – remodelers, multifamily builders, large builders, small builders, green builders, our associates, and everyone in between – has a tremendous stake in what Congress decides going forward. While the focus of our new website is on the mortgage interest deduction (a topic that clearly resonates with consumers), rest assured that the thrust of our advocacy agenda in Congress will, and does, encompass the preservation of all of the key housing incentives in our nation’s tax code.

A Final Note

I realize that other coalitions and organizations have contacted you regarding their websites and advocacy efforts related to the mortgage interest deduction. You should know that, since this issue first appeared in the news, NAHB has been highly engaged on Capitol Hill and in the media, and has proactively developed cutting edge research and polling data to ensure that all of our members’ interests are fully represented as the debate unfolds.

Once again, we find our industry in a fight that will require every member of the NAHB federation to unite with a common voice and common purpose.  I know I can count on you to stand shoulder-to-shoulder with your fellow NAHB members to stop this attack on the American Dream.

Should you have questions regarding the commission’s report or the above communication, please feel free to send them to and our staff will respond as quickly as possible.
Thank you,
Bob Jones
2010 NAHB Chairman of the Board

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