“Big Beautiful Bill”—Here’s What It Means for Housing and Mortgages

On July 4, 2025, the “One Big Beautiful Bill Act” was made into law (House of Representatives Bill 1). It’s a massive tax and budget bill with several changes that could directly or indirectly impact homeowners, buyers, and the mortgage industry.

Here’s what you need to know in plain English:

1. Bigger Tax Break for State and Local Taxes (SALT Deduction)
Homeowners can now deduct up to $40,000 in property taxes and state income taxes on their federal tax return—up from the old limit of $10,000. This tax break, called the SALT deduction, had been capped since 2018 and hit people in high-tax states the hardest (like California, New York, and New Jersey). Raising the cap means some homeowners may now owe less in federal taxes—which could make owning a home more affordable.

2. Mortgage Interest Tax Break Is Staying
There was a lot of concern that the tax break for mortgage interest—where you can deduct the interest you pay on your home loan—might go away in 2025. This bill locks it in permanently. That means homeowners can continue to reduce their taxable income by writing off the interest portion of their mortgage payments, which can save thousands of dollars over time. Lenders and borrowers now have more certainty when planning for the future.

3. Temporary Tax Help for Working Families
The bill adds short-term tax deductions for things like overtime pay, tips, and auto loan interest, and it also increases the child tax credit. These changes only last until around 2028, but they could help families with tighter budgets—especially those trying to qualify for a mortgage or afford monthly payments.

4. No Direct Housing Program Changes
This bill doesn’t make changes to specific housing programs like FHA loans or Fannie Mae/Freddie Mac rules. Instead, its impact on housing is mostly indirect—through tax savings that can leave more money in people’s pockets to buy or keep their homes.

In Summary
This new law gives homeowners and buyers more predictable tax rules and restores some valuable deductions. For people in high-tax states or with larger mortgages, the changes could make homeownership more affordable. And for mortgage professionals, it creates a more stable environment for advising clients.

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Source: National Mortgage Professional, “President Trump Signs Big Beautiful Bill — Here’s What It Means For Mortgage And Housing” — July 4, 2025
https://nationalmortgageprofessional.com/news/president-trump-signs-big-beautiful-bill-heres-what-it-means-mortgage-and-housing