Bill > HB3900

This bill modifies Oregon's income tax code to limit mortgage interest deductions and create a new housing opportunity fund. Specifically, the legislation disallows mortgage interest deductions for second homes or additional residences, except in certain circumstances like actively marketing the property for sale. For principal residences, the bill introduces a phased reduction of the mortgage interest deduction for taxpayers with federal adjusted gross income over $200,000, completely eliminating the deduction for those with income exceeding $250,000. The bill establishes the Oregon Housing Opportunity Account, which will receive the estimated additional tax revenue generated by these deduction restrictions. The funds will be administered by the Housing and Community Services Department to support various affordable housing and homelessness prevention programs, with a focus on promoting homeownership among racial groups with lower ownership rates and supporting populations with limited housing access. The changes will apply to tax years beginning on or after January 1, 2026, and the bill takes effect 91 days after the legislative session adjourns. The proposed programs include rental assistance, down payment assistance, home repairs, foreclosure counseling, and support for vulnerable populations such as veterans, people with disabilities, seniors, and families seeking reunification.

Housing and Urban Affairs

https://olis.oregonlegislature.gov/liz/2025R1/Measures/Overview/HB3900