With the passage of the new legislation this summer, there was a big win for those with mortgage insurance. The bill allows for the permanent reinstatement of the mortgage insurance premium tax deduction. This deduction was allowed starting in 2007 and expired in 2021. It is now permanent and will help those with mortgage insurance of all types (conventional PMI, FHA, VA and USDA).
There are a few key pieces to this. The first is that it is for individuals with Annual Gross Income (AGI) up to $100,000 (or $50,000 if married filing separately) you are allowed to deduct 100% of the mortgage insurance premium. The deduction gradually phases out between $100,000-109,000 AGI.
This deduction is for primary residences and second homes only, if you have an investment property the deduction will not apply.
You have to itemize to get this deduction. If you have questions on this, you may want to reach out to your CPA or whoever prepares your taxes. This is effective for the 2026 tax year.
This will help promote affordability in homeownership, especially those first time homebuyers using low down payment options.
Leslie Vanderwerf, NMLS ID#335509, CrossCountry Mortgage LLC, An Equal Housing Lender, NMLS#3029 – Email – Website
