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With the recent passage of the One Big Beautiful Bill, several provisions directly affect our work in mortgage and housing. While the bill carries political weight in the headlines, the focus must remain on what it means for the clients and communities we serve. To that end, here are the most relevant provisions for mortgage professionals:
Mortgage insurance tax deduction reinstated — This deduction, which expired in 2021 but is now permanent and subject to income limits, can offer meaningful tax savings for borrowers with low down payments.
Mortgage interest deduction cap unchanged — The $750,000 cap remains in place. While not a new benefit, this provides continuity for higher-income buyers planning purchases or refinances.
No new federal homebuyer assistance — There are no new federal down payment assistance programs. This elevates the role of the Iowa Finance Authority and local programs as essential resources for affordability tools such as grants, forgivable loans, and second liens.
SALT deduction cap increased — The cap on state and local tax (SALT) deductions rises from $10,000 to $40,000 per household for the next four years. This could shift affordability discussions, especially for clients in higher-valued homes facing steep property taxes.
Section 1031 exchange remains untouched — No changes to this vital real estate investment mechanism, which helps maintain investor activity and housing supply, particularly in rental markets.
The more informed we are, the more confidently we can guide our clients, realtors and community partners. Let’s continue to lead the way through education, collaboration and service.
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