MAKE A BREAK

Tax Incentives Aren’t Just for Millionaires.
Here’s One That’s Just for First-Time Buyers.

The Florida Housing Mortgage Credit Certificate (MCC) Program can help first-time homebuyers save money each year that they live in their home.

Through the MCC Program, administered by the Florida Housing Finance Corporation (FHFC), you can claim up to 50 percent of your paid mortgage interest each year as a tax credit on your federal tax return.

A tax credit actually lowers your tax bill dollar for dollar while a tax deduction reduces your taxable income. For example, if you’re in the 25 percent tax bracket, a $1,000 deduction lowers your tax bill by $250. But a $1,000 credit lowers the bill by the full $1,000.

The MCC credit is capped at $2,000 annually. Any amount above that is still eligible for the standard home mortgage interest deduction. Florida’s MCC Program is designed for first-time homebuyers purchasing a home, non-first time homebuyers purchasing a home in targeted areas in Florida or eligible veterans purchasing a home anywhere in Florida.  The MCC Program has income and purchase price that differ from county to county as well as by household size.

In the Northeast Florida counties of Baker, Clay, Duval, Flagler, Nassau and St. Johns, the purchase price limit ranges $265,884 (Flagler) to $437,179 (Clay). Income limits range from $70,920 for a household of one in Baker County to $89,600 for a household of three in St. Johns.

To participate, you must meet the qualifying requirements for a mortgage loan and use the home as your primary residence. A first-time buyer is considered to be a person who has never owned a home, or has not owned a home in the past three years.

The credit helps in another way: Your mortgage lender will deduct the amount of the credit from your estimated payment when calculating your debt-to-income ratios. This can help you qualify for a larger loan than you otherwise could.

Best of all, the credit lasts for as long as you own the home and it remains your principal residence, although you could be required to repay some of the subsidies if you sell your home before nine years.

FHFC has been authorized to grant up to $125 million in tax credits, which sounds like a lot. But with so many first-time buyers entering the market, it’s possible for the program to max out. So if you’re interested, you should start the application process right away.

Participating lenders in Northeast Florida include Academy Mortgage Corporation, FBC Mortgage, Nationstar Mortgage and Watson Mortgage Corporation.

For more information, visit floridahousing.org.