The “Home at Last” Mortgage Credit Cirtificate Program

The Nevada Rural Housing Authority has a series of Home at LastTM financing programs, one of them being the Home at LastTM Mortgage Credit Certificate (MCC).. This program, designed to help homebuyers in Nevada’s 15 rural counties and the rural portions of the two urban counties of Clark and Washoe purchase an existing or new home, provides a dollar-for-dollar federal income tax credit equal to the lesser of 50% of the interest paid on a mortgage loan or $2,000 each year. It is designed for low to moderate income households and, with one exception, is for first-time homebuyers who plan to occupy the home as their principal residence.

To be considered a first-time homebuyer, you must not have owned a home in the past three years. The one exception is that if you are a qualified veteran, you may have owned a home in the last three years and still participate in the program.

The program is available to qualified borrowers purchasing homes throughout the State of Nevada with the exception of cities and towns with population greater than 150,000 (such as Reno and greater Las Vegas). This leaves several other communities in Northern Nevada such as Sparks, Fernley, Carson City, Dayton, Gardnerville, Minden, Yerington, Fallon, and more.

Borrowers who qualify may obtain conventional, FHA, VA or rural housing loans at market rates with lenders participating in the program. A purchaser of a new or existing single family home may apply for an MCC at the time of loan application. Each of the loan programs has its own qualifying and down payment criteria. For example, VA loans require no down payment and FHA loans require a 3.5 percent down payment.

So, what is the benefit of the MCC? The MCC provides a federal income tax credit equal to 50% of the interest paid on a mortgage loan up to $2,000 per year. The credit may not exceed your annual federal income tax liability after all other credit and deductions have been taken into account. If there is an excess, though, it may be carried over for use in the following three tax years.

The MCC allows for a tax credit, not an additional deduction, so it is a dollar-for- dollar reduction in your federal tax liability. It is in effect for the life of your mortgage loan as long as the home you purchased is your primary residence.

As an example, assume you borrowed $150,000 at 4.5% interest. Your approximate annual interest on the loan is $6,700, so your tax credit would amount to the maximum available or $2,000 for that year. This is approximately $166 per month. This additional savings may allow you to qualify for a slightly higher mortgage payment. You may also be able to decrease your federal tax withholding from your paycheck, knowing you are going to have this credit, thus giving you more monthly disposable income. If you receive a tax refund, you can use it to pay down the principal of your mortgage or for home improvements. Savings continue each year based on the actual interest paid on the mortgage.

In addition to the requirement of first time homeownership, there are maximum income and home sales price limits. The maximum home cost varies from county to county. In Carson City, it is $368,076; in Douglas county it is $432,692; in Storey and Washoe counties, it is $372,692; in Lyon County, it is $305,769; in Elko, Eureka and Nye counties, it is $299,999; in Clark County it is $360,230; and in all other counties of Nevada, it is $250,200..

There are income limits on this program. In Carson City, a family of two or fewer may earn up to $83,400/year, and a family of 3 or more may earn up to $97,300/year. In Storey and Washoe counties, a family of two or more may earn up to $81,480/year, and a family of 3 or more may earn up to $95,060/year. Lyon County allows $77,640 for a two-person family and $90,580 for three or more. Douglas County limits are $93,840 for a two-person family and $109,480 for three or more.

The Nevada Rural housing Authority’s Home at LastTM was created to help first- time homebuyers qualify for home loans in rural areas. However, it is available in parts of Reno and all areas of Northern Nevada, including Sparks and Carson City. There are some fees associated with the Home at LastTM MCC, and they can be paid by the buyer, seller, or in certain cases may be financed.

For more information about this program and its participating lenders, go to www.nvrural.org. Contact Doug Kaller at Academy Mortgage today to be preapproved and find out more about financing a home.

 

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