| There is a special Federal tax credit available for Ohio | | | | less than the purchase price limits. |
| homebuyers. This is not a one time tax credit but one | | | | Other than income and purchase price limits, in order to |
| that a homebuyer may claim year after year. It is | | | | qualify a homebuyer must also meet the following |
| called a mortgage credit certificate and it creates an | | | | three conditions: |
| income tax deduction that reduces a household's | | | | |
| federal income tax liability and allows the household to | | | | 1. Occupy the property you are buying as your primary |
| have more discretionary income or more income to | | | | residence for every year you claim the MCC. If the |
| make a higher mortgage payment. The mortgage | | | | property ever ceases to be your primary residence, |
| credit certificate (MCC) is being administered by the | | | | OHFA may revoke your MCC approval. |
| Ohio Housing Finance Agency (OHFA) and is available | | | | 2. Be creditworthy. You must meet standard credit |
| for Ohio home purchases only. A percentage of what | | | | and underwriting criteria established by the IRS and |
| a borrower pays in mortgage interest becomes a tax | | | | HUD for the MCC Program. |
| credit that the borrower can deduct dollar-for-dollar | | | | 3. Meet one of the following: |
| from their income tax liability. This percentage can be | | | | 4. - Be a first time homebuyer (Not having an |
| 20%, 25% or 30%. 20% for non-target area homes, | | | | ownership interest in their principal residence in the last |
| 25% for target area homes and 30% for REO | | | | three years.) |
| properties. The remaining portion of the mortgage | | | | 5. - Purchase a home in a target area. |
| interest continues to qualify as an itemized tax | | | | 6. - Be a military veteran who has received an |
| deduction, as long as the borrower has a sufficient tax | | | | honorable discharge. |
| liability. The mortgage credit certificate is only available | | | | Additional Property Requirements |
| for a home purchased as a principal residence. | | | | - New or existing single-family units, condominiums, and |
| How To calculate the tax credit. | | | | planned unit development homes within the State of |
| The calculation is not difficult. The borrower can | | | | Ohio. |
| calculate the tax credit by taking the total amount of | | | | - Modular or manufactured homes must be |
| interest paid in the calendar year and multiplying it by | | | | permanently affixed to the foundation and titled as real |
| 20%, 25% or 30% depending on the classification of | | | | estate to be eligible. |
| the purchase. Again, 20% for a non-target area home, | | | | Loan Types |
| 25% for a targeted home or 30% for an REO | | | | - Must be a fixed rate loan. |
| property. Please, keep in mind the maximum tax credit | | | | - May not be a refinance loan. |
| that can be claimed is $2,000 per year with the | | | | - FHA, Conventional, VA, USDA-RD all qualify. |
| mortgage credit certificate and a borrower cannot | | | | Mortgage Credit Certificates will be available for |
| claim an amount exceeding their Federal income tax | | | | homes which close on or after March 23, 2009. |
| liability for the year. | | | | This program is not available through all lenders. If you |
| There are income requirements for the program and | | | | are interested in learning more or to see if you qualify |
| the income varies by county, number of people in the | | | | your next step is to contact the right mortgage |
| homebuyer's family, whether the home purchased is in | | | | professional who can advise you on The Mortgage |
| a target or a non-target area and if the property is a | | | | Credit Certificate program. A mortgage professional |
| 1-family, 2 family, 3 family or 4 family home. The | | | | who is familiar with the mortgage credit certificate |
| purchase price limits vary depending on whether the | | | | program can check out the guidelines and qualifying |
| home is new, existing or located in a target or | | | | criteria to determine if you qualify. |
| non-target area. Caution- The FHA loan limits may be | | | | |