"This bill makes it easier for working Americans to buy and rent homes and strengthens the housing market across the country," Ellison said. "The Common Sense Housing Investment Act focuses our housing policy on the families who need it most."
Ellison said an estimated 17 million current mortgage holders would claim a tax benefit on their home if Congress passes his bill turning it into a tax credit.
The bill also would end the tax benefit on people with mortgages higher than $500,000. Together, Ellison says these changes would result in a tax cut for most families with incomes under $125,000 and a tax increase for others.
Ellison cited estimates saying that these changes would increase the rate of homeownership by 2.5 percent because it would be easier to understand the tax benefits of homeownership.
The proposal, cosponsored by Rep. Bobby Scott (D-Va.), comes as the two political parties continue to negotiate tax changes that might help raise tax revenue for the federal government. Republicans have proposed closing tax loopholes, which some say could include ending the mortgage interest deduction for the wealthy, while President Obama has proposed ending it for people above the 28 percent tax bracket.