Thursday, April 6, 2017

Only 1.2% of 2,500 Oregon FHA Loans in Jan-Feb 2017 Had Annual Interest Greater than $15,000.

Oregon's proposed legislation to reduce the mortgage interest deduction (HB 2006) would limit the annual interest that is deductible to $15,000 annually. 

I dug into recent FHA SF loan data to see how many Oregon FHA loans in 2017 exceeded the $15,000 in annual interest payments. 

I created the table pasted below that shows the results. Only 1.2% of nearly 2,500 FHA loans would have been impacted and the median annual interest for those loans was only $15,792. 

At a 9% state income tax rate, those buyers would continue to get $113 per month in benefits from the state MID deduction, and NO reduction in Federal MID. Their net loss of state MID for the $795 in interest in excess of $15,000 would be less than $6 a month, and even less after year 1. [interest declines during each year of the loan].

One additional note-all of the loans exceeding $15,000 in annual interest were in the Portland metro area.  

Originally created and posted on the Oregon Housing Blog

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