National policy has acknowledged the importance of the home in American family life for almost a century. But despite the fact that most Americans want change that will mend the housing market, create jobs and boost the overall economy, policymakers are proposing radical changes that threaten the dream of homeownership for millions of current and future Americans.

The policies that are being considered could negatively impact Americans’ ability to buy a first home, keep their current home or enter into the move-up market.

Mortgage interest deduction


Eliminating or limiting the mortgage interest deduction would impose a huge tax increase on millions of middle-class home owners and discourage prospective buyers. Changing the deduction would cause after-tax housing costs to increase, and housing demand to decrease.

The reduced demand would depress home prices. Such a change in home values could weaken the economic recovery and perhaps drive the nation’s economy back into recession.

Mandating downpayments

The national Qualified Residential Mortgage standard that is being proposed by federal agencies would require a minimum 20 percent downpayment and other stricter qualifications, which would keep home-ownership out of reach for most first-time home buyers and middleclass households. According to estimates, it would take 12 years for the typical family to save enough money for a 20 percent downpayment on a median-priced single-family home.

Creditworthy borrowers denied opportunities


Creditworthy borrowers are being prevented from buying homes by overly restrictive lending standards which is slowing the housing recovery and hurting the economic recovery.

Restoring the flow of credit to qualified home buyers will boost the housing market, help put America back to work, and strengthen the economic health of communities across the country by providing tax revenues that local governments need to fund schools, police and firefighters.

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