July 11, 2025

H.R. 1: New Housing Provisions That Could Impact Your Wallet

Last week, President Trump signed H.R. 1, nicknamed the One Big Beautiful Bill, into law—and it includes major housing-related provisions that could benefit both homebuyers and real estate investors. Here’s a breakdown of what’s inside:

1. Mortgage Insurance Premium Deductions Made Permanent

Homeowners can now permanently deduct mortgage insurance premiums, including:

• PMI
• FHA Mortgage Insurance Premiums (MIP)
• VA funding fees
• USDA guarantee fees

This is especially helpful for first-time buyers using low-down payment programs. The deduction is not available for incomes above $175,000 for single tax filers and joint filers making over $250,000. HR 1 also included a permanent $750,000 cap on mortgage interest deductions.

2. SALT Deduction Cap Increased to $40,000 (Temporarily)

The State and Local Tax (SALT) deduction cap will increase to $40,000 per household from 2025 to 2029, making homeownership more appealing for upper-middle-income earners. Eligible taxes include state and local income taxes and property taxes. A phase-down starts for incomes over $500,000.

3. Big Win for Rental Property Investors

The 20% Qualified Business Income (QBI) deduction for rental property investors has now been made permanent, offering long-term tax savings for landlords.

Closing Thoughts:

Whether you’re buying your first home or growing your real estate portfolio, H.R. 1 brings some lasting changes.

Important to note: No new federal down payment or homebuyer assistance/grants are included, which means buyers will continue to rely on state housing finance agencies (HFAs), local grants, and employer-assisted programs. I stay current on new down payment assistance programs (DPAPs) as they become available, so ask me for details about what’s available in the Sacramento region.