The Home Mortgage Interest Deduction: Should Reform Mean Fear?

Abstract

This article will examine the controversial home mortgage interest deduction (MID) detailed in 26 U.S. Code § 163 and investigate the new benefits and detriments available to future homeowners by the modifications made in the 2017 Tax Reform passed by Congress. Specifically, the article will focus on whether or not the original MID truly benefited low- to moderate-income families and contributed to the rise of homeownership as it is lauded to have done, or whether the nation’s tax dollars were simply returning to the hands of the upper-class due to their higher value mortgages. Furthermore, this article will analyze how the new clauses attached to the MID may affect not only homeownership rates, but which household income-levels benefit most.