Tax Question for Househack

[Reggie Lightfoot]

I purchased a duplex in 2021 with me owner occupying one side. The FHA loan used to finance the property had an upfront mortgage insurance premium of 1.75% of the loan amount ($5,404 in my case). In addition to this upfront fee, I am required to make monthly PMI payments as well ($216 per month).

As I understand it, I can deduct 50% of the monthly PMI payments on line 9 of Schedule E, but I'm uncertain what is done with the upfront PMI fee of 1.75% on FHA loans. Can I also deduct 50% of that on line 9, or what exactly can be done with that?

Any insight from someone who has been in this situation or understands this issue would be greatly appreciated!