With the increase in FHA loans (which have up front and monthly mortgage insurance), it's important to know, for yourself and for your clients, that Mortgage Insurance Premiums are tax deductible on Federal Income Tax Returns. This deduction is for both government and private mortgage insurance premiums. In order to qualify, the mortgage would have to have been originated between 2007 and 2010. Originally, it was put in place only for 2007 but the extension was granted as part of the Mortgage Forgiveness Debt Relief Act of 2007. In order to qualify for the full tax deduction, a family's adjusted gross income must be $100,000 or less; there is a partial deduction allowed for families with gross incomes up to $109,000. Mortgage insurance is required if a buyer puts less than 20% down when purchasing their home or if they do an FHA loan no matter how much they put down. FHA mortgage insurance is much lower, dollarwise, than a conventional loan, but it is good to know that as a buyer you can still get this tax deduction. In these days of declining property values, it is still difficult for many people to come up with 20% downpayment and mortgage insurance, and the tax deduction of mortgage insurance, allows more people to be able to purchase a home with less money down. Here in the Destin/Ft. Walton Beach, FL area, a lot of people are still able to get into a home with no money down at all via the FHA and Rural Housing Loan. With values down, and the tax deductibility and the first-time homebuyer's credit from HR 3221, it is a great time to buy a house!