Friday, June 12, 2009

A homebuyer assistance tool for first-time homebuyers in Portland.

If you know anyone who has never bought a home, here's one more reason why NOW is the time! Especially in Portland, where the PDC offers an amazing credit ON TOP OF the $8000 home buyers credit offered by the Feds. Look at how much they'll save! (and with low home prices, and low interest rates, the time will NEVER be better!)

Housing Services
Mortgage Credit Certificate

A homebuyer assistance tool for first-time homebuyers in Portland.

The Mortgage Credit Certificate (MCC) Program is for first-time homebuyers in Portland. An MCC provides homebuyers with an annual tax credit, which reduces their federal income taxes owed as long as they keep the loan and continue to occupy the home as their principal residence. The tax credit helps the homebuyer to more comfortably afford the monthly payment on their first home. The amount of the MCC tax credit will equal 20 percent of the annual mortgage interest paid by the homebuyer.

The following example shows how the amount of the MCC will be calculated. The example below assumes the homebuyer gets a 30-year mortgage of $250,000 with a 6.0% annual interest rate. Based on this example the total annual interest payments during the first year of the mortgage would be $15,000. Based on these assumptions here is how much tax credit they would get:

Example of a Mortgage Credit Certificate Calculation

1. Sample Home Loan Amount $250,000
2. Sample Annual Interest Rate 6.0%
3. Total Annual Interest Paid $15,000
4. Mortgage Credit Certificate Rate 20%
5. Annual MCC Amount (Line 3 x Line 4) $3,000
6. Monthly Credit Amount (Line 5 ÷ 12) $250

The amount of the annual tax credit is then deducted from the homebuyer’s total tax liability. If the homebuyer is not able to use the full amount of the MCC tax credit in a particular tax year— it may be carried forward for up to three calendar years. If the homebuyer’s total annual federal taxes is less than the total amount of the MCC, the MCC is most likely not the right program for them. The amount of MCC tax credit differs based on the amount of the homebuyer’s loan, interest rate and term of the loan. Each lender may treat the MCC differently for underwriting purposes and also depending on the type of loan selected. The above example is for educational purposes only and is not an actual offer of credit.

Eligible Homebuyer

First-time homebuyer, which is defined as not having owned a home in the past three years; this requirement is waived if the property is located in a “Target Area”
Annual household income limit is based on family size as follows:1-2 Persons-$70,000 3 or more persons-$80,500
Must meet first mortgage lender’s criteria for underwriting, credit and down payment requirements
Must occupy property as “principal residence” within 60 days of the purchasing the home

Eligible Property
Must be located within the Portland city limits
Must be owner-occupied during the life of the loan
Single-family units only, including condos and town homes
Maximum purchase price - $361,125 city-wide

You must use a participating lender, and Windermere Mortgage is one of them.

If you'd like more information, I'd be happy to speak to you, or put you in touch with Bertha Ferran at Windermere Mortgage.

More on the PDC web page here...

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