Over the course of the past several years, there have been myriad programs to both incentivize first-time homebuyers, and help alleviate the financial burden that can come with homeownership. One in particular, the first time homebuyer tax credit, was available between April 2008 and May 2010 and qualified for homes purchased as a primary residence. A federal program, it gave first-time homebuyers a tax credit equal to 10 percent of the purchase price of their home, up to a max of $8,000. While this particular program has expired, there are many state-based programs for first-time homebuyer programs to fill that void.
In the land of 10,000 lakes, the Minnesota Housing Finance Agency (www.MNHousing.gov) is the go-to for information on anything housing-related. The website offers resources on topics ranging from fix-up loans and assistance programs, to current interest rates and FAQs about PMI; the site also connects visitors to lending partners and opportunities for housing-related educational opportunities, some of which are requirements to using the agency’s programs.
If you’re considering buying a home in the coming year, the agency offers a tax credit through the Mortgage Credit Certificate program. With this program, qualifying borrowers (MCC must be approved prior to closing) can get 35% of mortgage interest back every year as a federal income tax credit, up to $2,000 per year—this can add up to as much as $50,000 in tax savings over the life of the loan.
With this program, a borrower can claim 35% of the mortgage interest paid each year as a federal income tax credit. The MCC can be combined with an affordable Minnesota Housing mortgage; in addition, a monthly payment loan is available for down payment and closing costs. To be eligible, the borrow must:
- Be a first-time homebuyer (or have not owned a home in three years)
- Qualify for a home mortgage
- Meet income limits
- Plan to live in the home
- Have a federal income tax liability
To see if this program is a good fit for your situation, visit the agency’s site to find a trusted lender to see if you qualify (you must apply for the MCC Program before your mortgage closes). It’s also important to determine if you’d benefit from, or are required to take homebuyer education, either Home Stretch for in-person training, or Framework for online training.
Questions or concerns? The HomesMSP team is always happy to chat and help you determine next steps. Contact us today to get started on your journey to homeownership!
Angela Anderson, 612-396-3654
Licensed Associate Working with Sharlene Hensrud of RE/MAX Results, and HomesMSP — Sharlene, John, Angela