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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 54 June 2025 J O U R N A L Government HOUSING MARKET PREPARES FOR TAX POLICY SHAKE-UP T he U.S. House of Representatives narrowly passed a tax reform measure, the One Big Beautiful Bill Act, by a vote of 215-214, legislation that will impact the real estate sector and affect household finances. Key aspects of the One Big Beautiful Bill Act of im- portance to the real estate and housing industries that will strengthen housing affordability, investment, and generation- al wealth include: • Enhancements to the Low-Income Housing Tax Credit (LIHTC) • Mortgage Interest Deduction (MID) • Estate tax certainty • Renewed Opportunity Zone incen- tives • The creation of tax-advantaged child investment accounts that can be used for qualified expenses of the beneficiary such as first-time home purchases Mortgage Bankers Association (MBA) President and CEO Bob Broeksmit, CMB, said, "MBA is pleased that this bill includes numerous tax provisions that will help to increase real estate investment in communities and improve the financial outcomes of homeowners, renters, and our members' businesses." Expansion of the LIHTC The One Big Beautiful Bill Act in- cludes changes to the LIHTC, impacting both the 9% and 4% LIHTCs. It also addresses tax-exempt entities, including private foundations and universities, and makes changes to employee compensa- tion limits for tax-exempt organizations. For 9% LIHTC, the bill restores the 9% LIHTC to its 2021 level for the years 2026-2029 and increases the allocation by 12.5%. The bill also lowers the bond-fi- nancing threshold for projects financed by bonds issued after 2025, but before 2030 to 25%, according to a report from CliftonLarsonAllen. Impact of the MID The bill preserves and makes perma- nent the Mortgage Interest Deduction (MID) at its current level. This means the bill intends to keep the deduction with the 2017 Tax Cuts and Jobs Act (TCJA)'s limitations. The TCJA was one of the big- gest tax overhauls in decades, and many of the provisions of the One Big Beautiful Bill Act that pertain to individuals are set to expire after 2025. According to the law firm Duane Morris, a significant portion of the current reconciliation bill focuses on extending or making permanent these provisions to preserve the existing framework for individuals, pass-through entities, and estates beyond 2025. There had been concern the MID might be reduced or eliminated as a budget offset from the bill. The National Association of Realtors (NAR) has expressed its support for this aspect of the measure, viewing it as a crucial benefit for homeowners and supporting housing market stability. In a recent national survey commissioned by NAR, Americans expressed strong support for retaining provisions in the 2017 Tax Cuts and Jobs Act critical to the real estate economy and homeowner- ship. The survey found that 76% of voters are aware of efforts to extend the Tax Cuts and Jobs Act. Among those familiar with the law, support grows significantly when specific provisions are highlighted, as 86% back lower income tax rates for individuals and married couples, 83% support a new 20% deduction for inde- pendent contractors and small business- es earning under $400,000, and 80% favor tax incentives aimed at spurring investment in underserved communities. Estate Tax Certainty One Big Beautiful Bill will make per- manent the doubled estate and gift tax exemption, currently at $13.99 million per person in 2025, and increase it to $15