Congress and President Trump recently passed the ‘Big Beautiful Bill’ or ‘BBB’, which has far-reaching implications on nearly every facet of the country. The massive piece of spending legislation has businesses across the nation analyzing how it will affect their markets, the way they address the changing environment, and how to move forward.
The mortgage industry is no exception. The new bill has created some significant opportunities and potential challenges for the entire value chain from borrowers to brokers to lenders.
A&D Mortgage continues its vigilance, adapting to the needs of our partners and creating programs to help them succeed. Veteran mortgage professional Michael Pearson, SVP Business Development at A&D Mortgage has put together an excellent list of ways partners can help their clients capitalize on the new rules.
Pearson even breaks down how partners can approach the topic by providing some key talking points and benefits, while keeping in mind any associated limitations. Here are some ways you can leverage the new legislation to your advantage and your borrowers.
SALT Deduction Cap Raised to $40,000
- Helps: Buyers in high-tax states (CA, NY, NJ, CT, IL)
- Why it matters: The new cap allows buyers to deduct up to $40K in state and local taxes, which is up from $10K. That lowers their overall tax burden, which frees up more income to qualify.
Originator Talking Point:/
“This gives you back thousands in tax savings every year and makes it easier to afford more home, especially in high-tax areas.”
Great for: Move-up buyers, jumbo/conforming high balance, Non-QM
Not applicable in states like Florida, Texas, or Nevada (no state income tax).
Mortgage Interest Deduction Limit Stabilized
- Helps: Mid-to-upper income buyers
- Why it matters: The $750,000 cap on mortgage interest deductions is now permanent. So, there are no more sunset dates or guesswork.
Originator Talking Point:
“This gives you long-term tax confidence, especially if you’re taking on a larger mortgage. No surprises down the road.”
Great for: Primary residence buyers, refinances, long-term buyers
More Affordable Housing on the Way
- Helps: First-time and lower-income buyers
- Why it matters: Increased Low-Income Housing Tax Credits (LIHTC) will spur development of more entry-level housing. This may increase inventory in key markets.
Originator Talking Point:
“Affordable options are coming back, and we’re ready to help you get pre-approved so you’re first in line when they hit the market.”
Great for: FHA, VA, low down payment conventional, DPA buyers
Tax Relief = Easier Loan Qualification
- Helps: Middle-income working families
- Why it matters: Broad tax cuts improve net take-home pay, which can improve DTI and eligibility across many loan types.
Originator Talking Point:
“Even if you didn’t qualify before, the extra tax savings could help tip the scales now. Let’s recheck your numbers.”
Great for: Bank statement loans, Alt-doc, borrowers with thin income documentation
Inflation Risk Means Rate Urgency
- What’s coming: Higher government spending may drive inflation and interest rates up later this year.
- Why it matters: Waiting could cost buyers in the form of higher payments. This urgency is important with home prices still climbing in many markets.
Originator Talking Point:
“This might be your window. Lock in tax benefits and today’s rate while the market is still in your favor.”
Great for: Purchase urgency, refinance now messaging
Final Thoughts
Markets can change like the weather and for a variety of reasons. Regulations, tax policies, economic conditions all play a part making the mortgage industry challenging. The most successful people are those that can adapt to the changing environments and find solutions.
Utilizing these strategies can be a useful activity in that endeavor. A&D Mortgage will be here to assist our partners in overcoming these challenges just as we have for the last 20 years.
