Personal income tax credits in the form of mortgage credit certificates
(MCCs) are also available to first-time buyers.
These programs, restricted to low and moderate-income residents earning up to 100% of area median income (AMI), provide closing costs grants, 3% simple interest down payment loans fully deferred for 30 years, and mortgage credit certificates
for accessing federal LMI tax credits.
Other Home Possible changes announced at the MBA National Secondary Market Conference will cut the minimum borrower contribution for financing three-to-four-unit properties from 5 percent to 3 percent and enable borrowers to use Mortgage Credit Certificates
(MCCs) and Rural Housing Service (RHS) Leveraged Seconds.
Of great interest to both real estate professionals and consumers are the provisions concerning the permanent extensions of mortgage revenue bonds and mortgage credit certificates
; passive loss tax reform; and the removal of disincentives to workouts of troubled commercial real estate loans.
Our nation has five primary federal tax incentives for homeownership: the mortgage interest deduction (MID), the real estate tax deduction, the capital gains tax exclusion, mortgage revenue bonds (MRBs) and mortgage credit certificates
* Mortgage credit certificates
- To match Fannie and Freddie's policy, FHA direct endorsement (DE) lenders may now consider the tax credit resulting from mortgage credit certificates
as a direct reduction in housing expense.