Today, both Hawaii and the nation face unprecedented assaults on homeownership. The mortgage interest deduction, a cornerstone of the “American Dream of Homeownership,” has been in place since the inception of the tax code in 1913 and supports the aspirations of families at all income levels to become homeowners.

Specific proposals have emerged in Congress to eliminate or curtail the mortgage interest deduction in order to reduce the federal deficit. Such a move would result in a huge tax hike for millions of middle-class homeowners and further depress home values, leaving more homeowners with “underwater” mortgages that would fuel even more foreclosures. In Hawaii, losing the mortgage interest deduction is an unprecedented tax increase that would devastate our families.


Six federal agencies are proposing a national Qualified Residential Mortgage standard that would require a minimum 20 percent downpayment and other stricter qualifications, which would keep homeownership out of reach for most first-time home buyers and middle-class households. The National Association of Home Builders estimates that it would take 12 years for a typical family to save enough money for a 20 percent downpayment on a median-priced single-family home on the mainland. In Hawaii, our median-priced single family home is $585,000 and it would take even longer.

Some members of Congress are actively pushing to abolish Fannie Mae and Freddie Mac and end the federal backstop for housing.

Absent a federal role to help absorb market risk, private lenders would increase interest rates and fees on all types of available financing options. The 30year, fixed-rate mortgage the major housing finance tool for most Americans would become increasingly scarce and much more costly, pricing many credit-worthy borrowers out of the marketplace. Complicating the situation, the federal government is looking to trim back the Federal Housing Administration’s participation in the market, which would further limit the availability of low downpayment mortgages.


The federal proposals now under consideration would reverse national housing policies that have helped generations of American households to own their homes, enter the ranks of the middle-class, build strong and stable neighborhoods and communities, and provide a steppingstone to greater long-term financial security.

Call, write or email U.S. Sens. Daniel Inouye and Daniel Akaka, state Reps. Mazie Hirono and Colleen Hanabusa to tell them how important the mortgage interest deduction is to you. Ask them to support home ownership and the mortgage interest deduction, and remind them why owning a home continues to be a strong core value for the people of Hawaii.

Karen Nakamura is executive vice president / CEO of the Building Industry Association of Hawaii.