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PMI PAID IN 2007 TO BE TAX DEDUCTIBLE
WASHINGTON Dec. 12, 2006 Homeowners who pay less than 20 percent down must, many
times, pay for private mortgage insurance (PMI), but a law recently passed by Congress makes that
cost fully deductible on income taxes starting in 2007. It applies to new loans for households
making less than $100,000 per year.
The change also applies to mortgage insurance issued in combination with a Federal Housing
Administration (FHA) loan.
Private mortgage insurance is often required of borrowers who don't have down payments of at
least 20 percent, and don't take out a second "piggyback" loan. Government insurance
is mostly offered through the program to borrowers considered too risky for traditional loans
programs, usually first-time home buyers. Military veterans also take it out.
"Making the cost of mortgage insurance tax deductible helps those who need it most: low- and
moderate-income Americans, primarily first-time home buyers, who are financially responsible but
simply do not have the means to amass a 20 percent down payment," says Steve Smith, Chief Executive
Officer of The PMI Group Inc.
A broad range of consumer, business, taxpayer, civil rights, civic and labor groups have supported the
legislation.
© 2006 FLORIDA ASSOCIATION OF REALTORS®
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