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Palm Beach County Homebuyer’s can receive a tax credit of up to $4,000 per year for every year of their mortgage. That means a tax credit of up to $120,000 over 30 years.
What is a Mortgage Credit Certificate?
A Mortgage Credit Certificate (MCC) allows the homebuyer to claim a tax credit for some portion of the mortgage interest paid per year. It is a dollar for dollar reduction against their federal tax liability.
Who Can Get The Credit?
Any first time homebuyer, as defined by the Internal Revenue Code, whose income generally does not exceed 115% of the area median income is eligible for the MCC program if the property is in a designated county. Palm Beach is one of those areas. These requirements do not apply if the homebuyer is buying in a federally designated target area.
The maximum allowable income to qualify in Palm Beach County is $90,450 for a household of 1 of 2 residents and $105,560 for larger households. The maximum purchase price is $381,375 and higher for multiple units with the maximum amount of $896,390.
How much is the credit issued under the MCC program?
An MCC may be issued to the homebuyers at tax credit rates varying from 10 percent to 50 percent based on the mortgage interest paid per year capped at $4,000 annually. The Housing Finance Authority of Palm Beach County determines the tax credit rate. This credit is received for every year of the mortgage for a total of up to $120,000 over the life of the loan.
The credit is non-refundable but may be carried forward for a period of up to three (3) years.
What is the program criteria?
All mortgage types are eligible for the program but must be underwritten according to FHA, VA, RD, or conventional loan criteria.
New and existing single family homes, duplexes, townhomes, condominiums and manufactured homes (with certain restrictions) are eligible properties.
Purchase price and income limits, adjusted by household size apply. The homebuyer must also occupy the property as their principal residence (as mentioned above).
How does the homebuyer benefit frm a MCC?
The homeowner may deduct their credit from their annual taxes or may adjust their W-4 deductions to gain additional monthly income (which will often assist in qualifying for a mortgage). We suggest that you discuss this matter with your tax professional or loan originator. Utilizing this program you may reduce your actual interest rate as well.
