Private mortgage insurance (PMI) programs have helped open a window of opportunity for a number of homebuyers-and analysts expect that window to open even wider.

PMI helps make the housing market more accessible to buyers by letting them make down payments of just 3 percent or less on houses, as opposed to the 20 percent usually required without the insurance. A new bill in Congress may make PMI even more affordable and possibly open the market further. It's expected to save soon-to-be and current homeowners hundreds each year.

Called the Mortgage Insurance Fairness Act of 2005, the bill calls for private and government mortgage insurance payments to be tax deductible for individuals and families making less than $100,000 a year. Currently, PMI payments are not tax deductible.

The insurance has been used by millions of first-time, middle-and low-income buyers, many of whom would get a tax deduction on their payments if this widely lauded, bipartisan bill passes.

Proponents of the act, authored and sponsored by both Democrats and Republicans, say the deduction could save families $300 to $350 a year. In addition, families with Department of Veterans Affairs and Rural Housing Service programs would receive a one-time benefit estimated at $700 for VA families and $200 for RHS families.

Over the last five years, mortgage insurance and guaranty programs covered 47 percent of all home purchase loans made to African-American and Hispanic borrowers and 47 percent of loans to borrowers with incomes below the median income of their area-and those numbers may soon grow.

The federal government recently set a goal of increasing the number of homeowners in the U.S. by 5.5 million as of 2010. Housing advocates say that making mortgage insurance payments tax deductible will help the U.S. reach that goal.

"In today's housing market, families are faced with the potential of having a down payment that 50 years ago equaled the total cost of a home. Fewer and fewer families are able to save that amount of money," said Bruce Hahn of the American Homeowners Grassroots Alliance. "By allowing the deductibility of private and government mortgage insurance, you help tear down one of the barriers to homeownership and provide an opportunity for citizens to achieve the American dream."

To let your representative know how you feel about the Mortgage Insurance Fairness Act of 2005 (referred to as H.R. 3098 or S. 132), visit www.house.gov.

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