The
Mortgage Credit Certificate program
allows first-time home buyers to take
advantage of a special federal income
tax credit. This program allows buyers
credit in qualifying for the tax advantage
they'll receive after they purchase
the home.
The
amount of the credit is tied to
a local formula that every city
with an MCC program must follow.
A MCC credit, which can total $2,000
or more, reduces the borrower's
federal tax liability by an amount
tied to how much one pays in annual
mortgage interest. Both the borrower's
income and the purchase price of
the home must fall within established
guidelines.
To
see if your community has a MCC
program, call your local housing
or redevelopment agency. You also
may inquire with your HomeJoy Real
Estate broker or the local association
of Realtors.
Q:
Are
there tax credits for first-time home
buyers?
A:
Many
city and county governments offer
Mortgage Credit Certificate programs,
which allow first-time home buyers
to take advantage of a special federal
income tax write-off, which makes
qualifying for a mortgage loan easier.
Requirements
vary from program to program. People
wanting to apply should contact
their local housing or community
development office.
Here
is a list of four general requirements
to keep in mind:
* Some credit may be claimed only
on your owner-occupied principal
residence.
*There are maximum income limits,
which vary by locality and family
size.
* You must be a first-time home
buyer, which means you must not
have had any kind of ownership interest
in a principal residence during
the past three years. This restriction
may be waived, however, if you are
buying property within certain target
areas.
* Allocations must be available.
A local MCC program may have to
decline new applications when it
runs out of funds.
Q:
What
are the rules for mortgage credit
certificates?
A:
To
qualify for a mortgage credit certificate,
both your income and the purchase
price of the home must fall within
established city guidelines. These
guidelines vary by city but generally
only permit people who earn an average
income or slightly higher than average
income.
A
limited number of cities have authorized
the MCC program. Contact your municipal
housing department for more information.
Copyright
2006 Inman News Features
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