Third Way Supports Rep. Tim Ryan’s Legislation to Build Wealth through Increased Home Equity

WASHINGTON – Today, Third Way came out in support of legislation introduced by Representative Tim Ryan (D-OH) that will incentivize middle-class homeowners to increase equity in their homes, rather than carry debt. Specifically, the Building Equity for the American Middle-Class Act (the BEAM Act) would encourage homeowners to pay down mortgage debt faster by offering a 50% refundable tax credit on additional principal payments individuals make above their monthly required payment, up to $1,000.

“It’s time to upend policies of the past and focus on solutions that allow families to succeed in a vastly new economic era,” said Gabe Horwitz, Vice President for the Economic Program at Third Way. “This innovative policy from Representative Tim Ryan does just that. It would flip the incentives that homeowners face leading to greater wealth for millions of American families.”

A middle-class homebuyer that purchases a $200,000 home and puts 10% down would typically pay about $310,000 over the course of the mortgage. If that same homebuyer fully utilized this tax credit, however, they would save $20,000 and own their home outright two and a half years earlier. Most importantly, though, they would own more of their home throughout the life of the mortgage, giving them a bigger cushion against housing market downturns.

For more information on home equity and federal policy, please see our Home Equity Vouchers report: http://bit.ly/1Uz8Hwl.