I 

115TH CONGRESS 

1ST SESSION H. R. 948 

To amend the Internal Revenue Code of 1986 to replace the mortgage 

interest deduction with a nonrefundable credit for indebtedness secured 

by a residence, to provide affordable housing to extremely low-income 

families, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 7, 2017 

Mr. ELLISON introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Financial Services, for a period to be subsequently determined by the Speaker, 

in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To amend the Internal Revenue Code of 1986 to replace 

the mortgage interest deduction with a nonrefundable 

credit for indebtedness secured by a residence, to provide 

affordable housing to extremely low-income families, and 

for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Common Sense Hous5 ing Investment Act of 2017’’. 


srobinson on DSK5SPTVN1PROD with BILLS
2 

•HR 948 IH

1 SEC. 2. CONGRESSIONAL FINDINGS. 

2 The Congress finds the following: 

3 (1) Two principal Federal housing goals are to 

4 increase the rate of home ownership and make rent5 al housing affordable for low-income families and in6 dividuals. 

7 (2) Much more progress has been achieved on 

8 the first goal than on the second goal. 

9 (3) The Federal Government devotes more than 

10 three times the amount of budgetary resources to 

11 supporting home ownership than it devotes to mak12 ing affordable rental housing available. 

13 (4) The burden of housing costs is more pro14 nounced among renters than among owners. 

15 (5) There is a shortage of more than 7 million 

16 homes affordable to families in the bottom 20 per17 cent of income, meaning that there are only 31 af18 fordable units for every 100 families. 

19 (6) Only one in four families that qualify for 

20 rental housing assistance receives benefits. 

21 (7) Housing assistance waiting lists can be 10 

22 years long and in many communities are closed. 

23 (8) The shortage of rental homes that are af24 fordable for extremely low-income households to be 

25 the principal cause of homelessness in the United 

26 States. 


srobinson on DSK5SPTVN1PROD with BILLS
3 

•HR 948 IH

1 (9) Public housing facilities in the United 

2 States have more than $26 billion in deferred main3 tenance after decades of neglect which results in a 

4 loss of 10,000 units each year. 

5 (10) The low-income housing tax credit success6 fully provides 100,000 units of affordable housing 

7 every year. 

8 (11) Every tax reform commission has rec9 ommended capping the mortgage interest deduction 

10 and converting it to a fairer and simpler credit. 

11 (12) More than 75 percent of the value of the 

12 mortgage interest deduction inures to the benefit of 

13 the top 20 percent of earners. 

14 (13) Fewer than half of tax filers with a home 

15 mortgage claim the mortgage interest deduction. 

16 (14) Only 9 percent of rural tax filers claim the 

17 mortgage interest deduction. 

18 (15) Ninety-four percent of homes sold between 

19 2013 and 2015 sold for less than $500,000. 

20 (16) A better approach that provides equitable 

21 benefits for families who buy homes, enables more 

22 low- and moderate-income homeowners to receive a 

23 benefit, and invests in affordable rental housing to 

24 assist those who used to be homeless or who have 


srobinson on DSK5SPTVN1PROD with BILLS
4 

•HR 948 IH

1 extremely or very low incomes is needed to strength2 en families and communities. 

3 SEC. 3. REPLACEMENT OF MORTGAGE INTEREST DEDUC4 TION WITH MORTGAGE INTEREST CREDIT. 

5 (a) NONREFUNDABLE CREDIT.—Subpart A of part 

6 IV of subchapter A of chapter 1 of the Internal Revenue 

7 Code of 1986 (relating to nonrefundable personal credits) 

8 is amended by inserting after section 25D the following 

9 new section: 

10 ‘‘SEC. 25E. INTEREST ON INDEBTEDNESS SECURED BY 

11 QUALIFIED RESIDENCE. 

12 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in13 dividual, there shall be allowed as a credit against the tax 

14 imposed by this chapter for the taxable year an amount 

15 equal to 15 percent of the qualified residence interest paid 

16 or accrued during the taxable year. 

17 ‘‘(b) QUALIFIED RESIDENCE INTEREST.—For pur18 poses of this section— 

19 ‘‘(1) IN GENERAL.—The term ‘qualified resi20 dence interest’ means interest which is paid or ac21 crued during the taxable year on— 

22 ‘‘(A) acquisition indebtedness with respect 

23 to any qualified residence of the taxpayer, or 

24 ‘‘(B) home equity indebtedness with re25 spect to any qualified residence of the taxpayer. 


srobinson on DSK5SPTVN1PROD with BILLS
5 

•HR 948 IH

1 For purposes of the preceding sentence, the deter2 mination of whether any property is a qualified resi3 dence of the taxpayer shall be made as of the time 

4 the interest is accrued. 

5 ‘‘(2) OVERALL LIMITATION.—The aggregate 

6 amount of indebtedness taken into account for any 

7 period for purposes of this section shall not exceed 

8 $500,000 ($250,000 in the case of a married indi9 vidual filing a separate return or unmarried individ10 uals filing separate returns for the same property). 

11 ‘‘(3) ACQUISITION INDEBTEDNESS.—The term 

12 ‘acquisition indebtedness’ means any indebtedness 

13 which— 

14 ‘‘(A) is incurred in acquiring, constructing, 

15 or substantially improving any qualified resi16 dence of the taxpayer, and 

17 ‘‘(B) is secured by such residence. 

18 Such term also includes any indebtedness secured by 

19 such residence resulting from the refinancing of in20 debtedness meeting the requirements of the pre21 ceding sentence (or this sentence), but only to the 

22 extent the amount of the indebtedness resulting 

23 from such refinancing does not exceed the amount of 

24 the refinanced indebtedness. 

25 ‘‘(4) HOME EQUITY INDEBTEDNESS.— 


srobinson on DSK5SPTVN1PROD with BILLS
6 

•HR 948 IH

1 ‘‘(A) IN GENERAL.—The term ‘home eq2 uity indebtedness’ means any indebtedness 

3 (other than acquisition indebtedness) secured 

4 by a qualified residence to the extent the aggre5 gate amount of such indebtedness does not ex6 ceed— 

7 ‘‘(i) the fair market value of such 

8 qualified residence, reduced by 

9 ‘‘(ii) the amount of acquisition indebt10 edness with respect to such residence. 

11 ‘‘(B) LIMITATION.—The aggregate amount 

12 treated as home equity indebtedness for any pe13 riod shall not exceed $100,000 ($50,000 in the 

14 case of a married individual filing a separate re15 turn). 

16 ‘‘(c) SPECIAL RULES.—For purposes of this sec17 tion— 

18 ‘‘(1) QUALIFIED RESIDENCE.—The term ‘quali19 fied residence’ means— 

20 ‘‘(A) the principal residence (within the 

21 meaning of section 121) of the taxpayer, and 

22 ‘‘(B) 1 other residence of the taxpayer 

23 which is selected by the taxpayer for purposes 

24 of this subsection for the taxable year and 


srobinson on DSK5SPTVN1PROD with BILLS
7 

•HR 948 IH

1 which is used by the taxpayer as a residence 

2 (within the meaning of section 280A(d)(1)). 

3 ‘‘(2) MARRIED INDIVIDUALS FILING SEPARATE

4 RETURNS.—If a married couple does not file a joint 

5 return for the taxable year— 

6 ‘‘(A) such couple shall be treated as 1 tax7 payer for purposes of paragraph (1), and 

8 ‘‘(B) each individual shall be entitled to 

9 take into account 1 residence unless both indi10 viduals consent in writing to 1 individual taking 

11 into account the principal residence and 1 other 

12 residence. 

13 ‘‘(3) RESIDENCE NOT RENTED.—For purposes 

14 of paragraph (1)(B), notwithstanding section 

15 280A(d)(1), if the taxpayer does not rent a dwelling 

16 unit at any time during a taxable year, such unit 

17 may be treated as a residence for such taxable year. 

18 ‘‘(4) UNENFORCEABLE SECURITY INTERESTS.— 

19 Indebtedness shall not fail to be treated as secured 

20 by any property solely because, under any applicable 

21 State or local homestead or other debtor protection 

22 law in effect on August 16, 1986, the security inter23 est is ineffective or the enforceability of the security 

24 interest is restricted. 


srobinson on DSK5SPTVN1PROD with BILLS
8 

•HR 948 IH

1 ‘‘(5) SPECIAL RULES FOR ESTATES AND

2 TRUSTS.—For purposes of determining whether any 

3 interest paid or accrued by an estate or trust is 

4 qualified residence interest, any residence held by 

5 such estate or trust shall be treated as a qualified 

6 residence of such estate or trust if such estate or 

7 trust establishes that such residence is a qualified 

8 residence of a beneficiary who has a present interest 

9 in such estate or trust or an interest in the resid10 uary of such estate or trust. 

11 ‘‘(d) COORDINATION WITH DEDUCTION.—In the case 

12 of any taxable year beginning in calendar years 2017 

13 through 2021, the taxpayer may elect to apply this section 

14 in lieu of the deduction under section 163 for qualified 

15 residence interest.’’. 

16 (b) PHASEOUT OF DEDUCTION.—Section 163(h) of 

17 such Code is amended by adding at the end the following 

18 new paragraph: 

19 ‘‘(6) PHASEOUT.— 

20 ‘‘(A) IN GENERAL.—In the case of any 

21 taxable year beginning in a calendar year after 

22 2017, the amount otherwise allowable as a de23 duction by reason of paragraph (2)(D) shall be 

24 the applicable percentage of such amount. 


srobinson on DSK5SPTVN1PROD with BILLS
9 

•HR 948 IH

1 ‘‘(B) APPLICABLE PERCENTAGE.—For 

2 purposes of subparagraph (A), the applicable 

3 percentage shall be determined in accordance 

4 with the following table: 

‘‘For taxable years beginning in calendar year: The applicable 

percentage is: 

2017 ............................................................................................ 100%

2018 ............................................................................................ 80%

2019 ............................................................................................ 60%

2020 ............................................................................................ 40%

2021 ............................................................................................ 20%

2022 and thereafter .................................................................... 0%.’’. 

5 (c) PHASEDOWN OF MORTGAGE LIMIT.—Subpara6 graph (B) of section 163(h)(3) of such Code is amended 

7 by adding at the end the following: 

8 ‘‘(iii) PHASEDOWN.— 

9 ‘‘(I) IN GENERAL.—In the case 

10 of any taxable year beginning in cal11 endar years 2017 through 2021, 

12 clause (ii) shall be applied by sub13 stituting the amounts specified in the 

14 table in subclause (II) of this clause 

15 for ‘$1,000,000’ and ‘$500,000’, re16 spectively. 

17 ‘‘(II) PHASEDOWN AMOUNTS.— 

18 For purposes of subclause (I), the 

19 amounts specified in this subclause 

20 for a taxable year shall be the 


srobinson on DSK5SPTVN1PROD with BILLS
10 

•HR 948 IH

1 amounts specified in the following 

2 table: 

‘‘For taxable years beginning in calendar year: 

Amount 

substituted 

for 

$1,000,000: 

Amount 

substituted 

for 

$500,000: 

2017 ........................................................................ $1,000,000 $500,000

2018 ........................................................................ $900,000 $450,000

2019 ........................................................................ $800,000 $400,000

2020 ........................................................................ $700,000 $350,000

2021 ........................................................................ $600,000 $300,000.’’. 

3 (d) CLERICAL AMENDMENT.—The table of sections 

4 for subpart A of part IV of subchapter A of chapter 1 

5 of such Code is amended by inserting after section 25D 

6 the following new item: 

‘‘Sec. 25E. Interest on indebtedness secured by qualified residence.’’. 

7 (e) EFFECTIVE DATE.—The amendments made by 

8 this section shall apply with respect to interest paid or 

9 accrued after December 31, 2016. 

10 SEC. 4. DEDUCTION ALLOWED FOR INTEREST AND TAXES 

11 RELATING TO LAND FOR DWELLING PUR12 POSES OWNED OR LEASED BY COOPERATIVE 

13 HOUSING CORPORATIONS. 

14 (a) IN GENERAL.—Subparagraph (B) of section 

15 216(b)(1) of the Internal Revenue Code of 1986 is amend16 ed by inserting ‘‘or land,’’ after ‘‘building,’’. 

17 (b) EFFECTIVE DATE.—The amendment made by 

18 subsection (a) shall apply to amounts paid or accrued after 

19 December 31, 2016. 


srobinson on DSK5SPTVN1PROD with BILLS
11 

•HR 948 IH

1 SEC. 5. USE OF MORTGAGE INTEREST SAVINGS TO IN2 CREASE LOW-INCOME HOUSING TAX CREDIT. 

3 (a) IN GENERAL.—Subclause (I) of section 

4 42(h)(3)(C)(ii) of the Internal Revenue Code of 1986 is 

5 amended by striking ‘‘$1.75 ($1.50 for 2001)’’ and insert6 ing ‘‘$2.70’’. 

7 (b) INFLATION ADJUSTMENT.—Subparagraph (H) of 

8 section 42(h)(3) of such Code is amended to read as fol9 lows: 

10 ‘‘(H) COST-OF-LIVING ADJUSTMENT.— 

11 ‘‘(i) IN GENERAL.—In the case of a 

12 calendar year after 2002, the $2,000,000 

13 amount in subparagraph (C) shall be in14 creased by an amount equal to— 

15 ‘‘(I) such dollar amount, multi16 plied by 

17 ‘‘(II) the cost-of-living adjust18 ment determined under section 1(f)(3) 

19 for such calendar year by substituting 

20 ‘calendar year 2001’ for ‘calendar 

21 year 1992’ in subparagraph (B) there22 of. 

23 ‘‘(ii) PER CAPITA AMOUNT.—In the 

24 case of a calendar year after 2017, the 

25 $2.70 amount in subparagraph (C) shall 

26 be increased by an amount equal to— 


srobinson on DSK5SPTVN1PROD with BILLS
12 

•HR 948 IH

1 ‘‘(I) such dollar amount, multi2 plied by 

3 ‘‘(II) the cost-of-living adjust4 ment determined under section 1(f)(3) 

5 for such calendar year by substituting 

6 ‘calendar year 2016’ for ‘calendar 

7 year 1992’ in subparagraph (B) there8 of. 

9 ‘‘(iii) ROUNDING.— 

10 ‘‘(I) In the case of the 

11 $2,000,000 amount, any increase 

12 under clause (i) which is not a mul13 tiple of $5,000 shall be rounded to the 

14 next lowest multiple of $5,000. 

15 ‘‘(II) In the case of the $2.70 

16 amount, any increase under clause (ii) 

17 which is not a multiple of 5 cents 

18 shall be rounded to the next lowest 

19 multiple of 5 cents.’’. 

20 (c) ELIGIBLE BASIS.—Clause (i) of section 

21 42(d)(5)(B) of such Code is amended by striking ‘‘and’’ 

22 at the end of subclause (I), by striking the period at the 

23 end of subclause (II) and inserting ‘‘, and’’, and by adding 

24 at the end the following: 


srobinson on DSK5SPTVN1PROD with BILLS
13 

•HR 948 IH

1 ‘‘(III) in the case of a building 

2 containing units which are designated 

3 to serve extremely low-income house4 holds by the State housing credit 

5 agency and require the increase in 

6 credit under this subparagraph in 

7 order for such building to be finan8 cially feasible as part of a qualified 

9 low-income housing project, the eligi10 ble basis of such building determined 

11 by the portion of such units shall be 

12 150 percent of such basis determined 

13 without regard to this subpara14 graph.’’. 

15 (d) EFFECTIVE DATE.—The amendments made by 

16 this section shall apply to allocations made in calendar 

17 years beginning after December 31, 2017. 

18 SEC. 6. USE OF MORTGAGE INTEREST SAVINGS FOR AF19 FORDABLE HOUSING PROGRAMS. 

20 (a) USE OF SAVINGS.—For each year, the Secretary 

21 of the Treasury shall determine the amount of revenues 

22 accruing to the general fund of the Treasury by reason 

23 of the enactment of section 3 of this Act that remain after 

24 use of such revenues in accordance with section 5 of this 


srobinson on DSK5SPTVN1PROD with BILLS
14 

•HR 948 IH

1 Act and shall credit an amount equal to such remaining 

2 revenues as follows: 

3 (1) HOUSING TRUST FUND.—The Secretary 

4 shall credit the Housing Trust Fund established 

5 under section 1338 of the Federal Housing Enter6 prises Financial Safety and Soundness Act of 1992 

7 (12 U.S.C. 4568) with an amount equal to 60 per8 cent of the amount of such remaining revenues. 

9 (2) RENTAL ASSISTANCE.—An amount equal to 

10 30 percent of the amount of such remaining reve11 nues shall be credited for rental assistance, which 

12 may include a new Renter’s Tax Credit and an ex13 pansion of rental assistance by the Secretary of 

14 Housing and Urban Development under any pro15 gram of such Department providing such assistance 

16 or by the Secretary of Agriculture under any rural 

17 housing program of such Department providing such 

18 assistance. 

19 (3) PUBLIC HOUSING CAPITAL FUND.—The 

20 Secretary shall credit an amount equal to 10 percent 

21 of the amount of such remaining revenues to the 

22 Public Housing Capital Fund under section 9(d) of 

23 the United States Housing Act of 1937 (42 U.S.C. 

24 1437g(d)). 


srobinson on DSK5SPTVN1PROD with BILLS
15 

•HR 948 IH

1 (b) CHANGES TO HOUSING TRUST FUND.—Not later 

2 than the expiration of the 6-month period beginning on 

3 the date of the enactment of this Act, the Secretary of 

4 Housing and Urban Development shall revise the regula5 tions relating to the Housing Trust Fund established 

6 under section 1338 of the Federal Housing Enterprises 

7 Financial Safety and Soundness Act of 1992 (12 U.S.C. 

8 4568) to provide that such section is carried out with the 

9 maximum amount of flexibility possible while complying 

10 with such section, which shall include revising such regula11 tions— 

12 (1) to increase the limitation on amounts from 

13 the Fund that are available for use for operating as14 sistance for housing; 

15 (2) to allow public housing agencies and tribally 

16 designated housing entities to be recipient of grants 

17 amounts from the Fund that are allocated to a State 

18 or State designated entity; and 

19 (3) eliminate the applicability of rules for the 

20 Fund that are based on the HOME Investment 

21 Partnerships Act (42 U.S.C. 1721 et seq.). 

Æ 


srobinson on DSK5SPTVN1PROD with BILLS