In late December 2006, Congress voted to make mortgage-insurance premiums tax deductible for the first time, in 2007. As with many new tax provisions, this is initially in effect for one yearmeaning for mortgage-insurance certificates issued between January 1 and December 31, 2007. Borrowers who are closing loans to either purchase homes or refinance in 2007, and who have annual household incomes of $100,000 or less, will be able to deduct the full cost of their mortgage-insurance premiums on their federal tax returns. Borrowers with incomes up to $109,000 can take advantage of a partial deduction. David Katkov, president and chief operating officer of PMI Mortgage Insurance, says, The median home price in the United States today is about $221,000which means a down-payment of more than $40,000, if you put down the traditional 20 percent. In high-cost areas such as California where the median home price is almost $549,000saving a 20-percent down-payment is even more of a challenge. In today’s climate of slowing home-price appreciation, an insured loan is a simple, safe, and smart way for people to get into a home and start building equity. Being able to deduct the cost of the premiums means more savings for consumers. Housing affordability is a challenge for most first-time homebuyers especially those in the low- to moderate-income bracket. Because traditional 20-percent down-payments are so high, borrowers today are increasingly looking for ways to buy homes with a lower down-payment. If the legislation has the desired effectto help low- and moderate-income Americans overcome barriers to homeownership, without having to resort to riskier loans that could put them at risk of losing their homes down the road, when their payments increase there’s a good chance that Congress will take that into account, when deciding whether to extend the deduction or make it permanent.