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.