🏡 What Real Estate Clients Need to Know About the “Big Beautiful Bill”

By Rory the Broker
Compadre Home & Loan | July 2025

Well, folks — it passed.

The “One Big Beautiful Bill” (a.k.a. H.R. 1) just cleared Congress and landed on the President’s desk, where it was signed into law with much political fanfare and zero chill. But while the headlines scream budget drama and D.C. showdowns, we’re here to talk about what really matters:

👉 What does this mean for your home, your mortgage, and your bottom line?

Whether you’re a homeowner, first-time buyer, seller, or savvy investor, this sweeping new legislation includes several key provisions that affect your money, your taxes, and your real estate strategy — and as always, your Compadre team is already ahead of the curve.

Let’s break it down.

✅ 1. Mortgage Insurance Just Got More Friendly (Tax-wise)

What changed: You can now permanently deduct mortgage insurance premiums — including PMI, FHA MIP, VA funding fees, and USDA fees — subject to income limits.

Why it matters:
If you’re putting less than 20% down, this deduction lowers your effective borrowing cost. It’s a quiet but powerful win for first-time buyers, VA clients, and anyone using low-down-payment financing.

👉 Compadre Tip: Ask us how this could affect your estimated monthly and after-tax costs when buying — especially with FHA and 3% down conventional loans.

🏠 2. Mortgage Interest Deduction Cap Locked at $750K

What changed: The cap on mortgage interest deductions stays permanently at $750,000 in loan amount.

Why it matters:
No more guessing or sunset dates. High-cost market buyers (that’s you, SoCal!) now have a known ceiling to plan around, whether you're buying or refinancing.

👉 Planning a move over $1M? We’ll help you calculate your true tax exposure so there are no surprises come April.

💼 3. No Federal Down Payment Assistance — So Local Experts Matter

What didn’t change:
The bill doesn’t include any new federal first-time buyer tax credits or down-payment assistance programs. In fact, HUD’s Green and Resilient Retrofit Program was scrapped.

Why it matters:
Buyers still need help getting in the door — but that help isn’t coming from D.C. any time soon.

👉 Good news: At Compadre, we know every California Housing Finance Agency, city grant, and employer matching program that still exists. That’s why you hire us — we connect the dots between you and the money.

🧾 4. SALT Deduction Cap Increased (Temporarily)

What changed: From 2025–2029, the cap on State and Local Tax (SALT) deductions jumps from $10,000 to $40,000 per household (phased down for incomes over $500K).

Why it matters:
If you own in California, you just got a deduction boost — and homeownership just got slightly more attractive for high-income households.

🧱 5. Low-Income Housing Tax Credit (LIHTC) Expansion

What changed:
Allocations for the 9% LIHTC are increased by 12.5%, and the bond financing requirement for 4% LIHTC is reduced from 50% to 25%.

Why it matters:
More credits = more affordable rental units = less pressure on entry-level home inventory. It also means more financing flexibility for developers and multifamily investors.

👉 Work with investors or developers? Compadre Mortgage understands the financing side of LIHTC deals and can help you structure long-term strategy.

🏢 6. Real Estate Investors: You Win Again

This bill is basically a mixtape of investor-friendly tax rules:

• 20% QBI Deduction Is Now Permanent: Rental property owners can continue to deduct 20% of their net rental income. Yes, really.
  
  

• Interest Deductions Stay Intact: Investors using leverage — especially DSCR and commercial loans — keep their mortgage interest deductions.
  
  

• 1031 Exchanges Survive: You can still defer capital gains by rolling into new properties.
  
  

• Qualified Opportunity Zones Stay: Still a great strategy for reinvesting and deferring tax on gains.
  
  

👉 Investor Translation:
You now have more certainty and flexibility than ever to expand your portfolio. And with rates holding firm, now’s the time to refi smart or trade up.

📈 7. Market Stability from a $5 Trillion Debt Ceiling Bump

What changed:
The bill raises the federal debt ceiling by $5 trillion.

Why it matters:
No government default = confidence in U.S. capital markets = stability in mortgage rates and investor liquidity.

It’s not flashy, but it keeps the machine running, which is a win for everyone in real estate.

🔑 What Should You Do with This Info?

Glad you asked.

Here’s what smart clients and savvy agents should take away from this:

For Homebuyers:

• Ask how PMI deductibility affects your total cost of ownership.
  
  

• In high-cost areas, plan around the $750K mortgage interest deduction cap.
  
  

• Explore local down payment assistance — we know where it is hiding.
  
  

For Sellers:

• Understand how these tax changes affect your buyer pool.
  
  

• Use investor tax perks (QBI, 1031) to attract the right buyer to your property.
  

For Investors:

• Lock in long-term benefits with the right loan structure.
  
  

• Talk to us about DSCR loans, portfolio strategy, and tax-efficient exits or exchanges.
  

🧠 Bottom Line from Rory the Broker

The One Big Beautiful Bill doesn’t reinvent the real estate industry — but it solidifies your tax playbook and provides some long-overdue certainty in key areas.

At Compadre Home & Loan, we’re not just watching legislation — we’re translating it into real wins for our clients. Whether you’re buying, selling, investing, or just plotting your next move — we’ve got the insight to help you make smart, strategic decisions.

📞 Call or text me at 760-216-4212
📅 Or schedule a private consult at RoryTheBroker.com

The rules just changed. Let's use them to your advantage.