A smart home buyer will want to take advantage of every cost assistance program available to them. This is especially true for first-time home buyers, and recently several new programs have come out to help this group of home buyers.
The Virginia Housing Development Authority (VHDA) recently announced a new product to help potential new homebuyers move from being renters to home owners. The Mortgage Credit Certificate (MCC) allows first time homebuyers to reduce the amount of federal income taxes owed through a tax credit. This is a dollar for dollar credit that could help new homeowners save thousands of dollars over the lifetime of their loan by reducing the federal tax dollars the homeowner will owe.
Here’s how it works:
When a new homeowner purchases a home, if they qualify for the MCC they can get a tax credit in the that is equal to 20% of the mortgage interest they will pay. If you pay $10,000 that year in mortgage interest, $2,000 off of that amount can be applied to the certificate. The remaining $8,000 can still be used as a tax deduction. This might seem confusing so the VHDA produced this great video to explain the whole program.
This program is limited to certain geographic areas, including here in Hampton Roads: Norfolk, Chesapeake, Gloucester County, Hampton, Isle of Wight County, James City County, Mathews County, Newport News, Poquoson, Portsmouth, Suffolk, Virginia Beach, Williamsburg, and York County are all included.
Make sure to partner with mortgage consultants who are educated and ready to help you in find the best programs for your home purchase. If you want to know more about this or other home buying assistance programs our best suggestion is to partner with your local REALTOR® and lender to determine your family’s specific needs. Together, you can come up with a plan to move from renting to buying this year.