First time homebuyer state tax credits
The federal first-time homebuyer tax credit programs expired near the end of 2011, but there is still tax help out there depending on the state or county where you live. For example, states such as Delaware, Texas, Kentucky and many more states have local homebuyer tax credit programs that you can take advantage of. Other states like California had discontinued their program right around the same time when the federal programs were discontinued.
Please keep in mind that to qualify for any of these state programs, it must be used for your primary residence, it must be your first home that you have ever owned, or you have not owned a home in the last three years. There are other qualifying factors that are not mentioned in this article in which you will need to study to make sure you qualify if your state or county offers mortgage tax credits.
As I mentioned above, Delaware is one of the states that offers tax credits. If you are a homebuyer who has purchased a primary home within Delaware for the first time in 3 years, and you have a household income and a property that has a purchase price that does not exceed the maximum limits set by the program, you may be able to take full advantage of the initiative that offers first-time borrowers no more than $2,000 in tax relief. You can find more information on the Program at this State of Delaware link.
Delaware State Housing Authority Director Anas Ben Addi’s opinion of the program that generated $8.4 million in federal tax credits for over 160 first-time homebuyers in 2013 was a good one. Addi had said, “When we first started there was an average of 30% of the home-owners who were dealing with us who were taking advantage of the program.” “As of last week, 82% of the loans that we have closed were able to take advantage of the First-Time Homebuyer Tax Credit. So I won’t be surprised if we hit the 90s or even 100% by next year.” This success has warranted the state’s decision to add an extra $62.8 million to fund the program all the way until 2016.
A similar program is Texas’s Mortgage Credit Certificate. Under this plan, homebuyers can claim a tax credit for a portion of the interest you pay on your mortgage per year. The requirements for this program are identical to Delawares’.
Qualifying borrowers must meet income and purchase requirements, must not have purchased a primary residence property in the last 3 years, meet all the requirements for the specific loan, and live in the property as their primary residence. If you can fulfill all of these conditions, you too can enjoy a tax credit of no more than $2,000 in the state of Texas. All of the vital information for this homebuyer tax credit program can be found at this Texas Housing Department link.
Kentucky also offers homebuyer tax credits through Mortgage Credit Certificates (MCC) which gives you a tax credit of 25 percent (not to exceed $2,000). To qualify for the program, the maximum home sales price has to be $243,000, and the maximum income limits for a 1-2 person household is up to $85,560, and a 3-4 person household is up to $99,820. All of the vital information for this program can be found at this Texas Housing Department link.
Although the original federal housing tax credit is gone for now, there are still options for homebuyers in a good number of areas. Make sure you check with your state and or local county to see if they might have similar programs like the ones mentioned in this article.
As we always express here on LoanSafe, the key to success is research and knowledge. Knowledge is power. You can also join our free forum at this link where borrowers, owners and mortgage professionals meet online to collaborate on a daily basis. In addition, if you would like to speak to a mortgage professional you can trust, please call our toll free mortgage help line at 1-800-779-7547.
