Military Veterans' Lawyer Blog
Texas Veteran’s seeking help buying and owning a home, just received a little extra help on February 9, 2010. Under this new program called the Texas Veteran’s Mortgage Credit Program, a veteran may apply and receive up to $2000 on the mortgage interest paid to own a home in the State of Texas.
For complete details please visit the website listed below or read the material copied from the site in the continued reading section.
From http://www.tdhca.state.tx.us/homeownership/fthb/mort_cred_certificate.htm#veteranmcc
Texas Veteran’s Mortgage Credit Program: The Texas Veteran’s Mortgage Credit Program gives those who served a chance to save. As a military veteran, you protected the American Dream. Now is your opportunity to live it. The Texas Veterans’ Mortgage Credit Program is part of and identical to the Texas Mortgage Credit Program – with one exception! For veteran’s that served in active duty, were honorably discharged as evidenced by Form DD-214 and who have not previously had a mortgage financed through a mortgage revenue bond program, are exempt from the first time homebuyer requirement. You must still meet the applicable acquisition and purchase price limit requirements of a non-targeted area unless purchasing in a targeted area census tract, Hurricane Rita Gulf Opportunity Zone or designated disaster area. Even better, if you are a veteran, are a first time homebuyer and buy a home before December 1, 2009, you can combine the $2,000 tax credit with the one-time federal Tax Credit of up to $8,000.
How much of a tax credit can be issued under the MCC program? The size of the annual tax credit will be 30% of the annual interest paid on the mortgage loan. However, the maximum amount of the tax credit shall not exceed $2,000 per year. The credit cannot be larger than the annual federal income tax liability, after all other credits and deductions have been taken into account. MCC credits in excess of the current year tax liability may, however, be carried forward for use in the subsequent three years.
MCC Example: MCCs are issued directly to qualifying Applicants who are then able each year to take a tax credit equal to a specified percentage of the interest paid on their mortgage not to exceed $2,000. The Mortgage Credit Certificate Rate is 30 percent. Thus, an Applicant with a $121,000.00 mortgage (30 year fixed with equal monthly installments of principal and interest) would realize the following savings:
MCC Example
Mortgage Amount: $121,000.00 Interest Rate: 6.0%
Total Interest Paid First year: $ 7,260.00 Mortgage Credit Certificate Rate: X .30
Tax Credit Amount: $2,178.00
$2,000 (max)
During the first year of the Program, this Applicant would be entitled to a tax credit of $2,000.00. Based upon such entitlement, he or she would be able to file in advance a revised W-4 withholding form taking into consideration this tax credit and have approximately $167.00 per month in additional disposable income. Additionally, taxpayers who file itemized returns may take a deduction for their mortgage interest paid each year, less an amount equal to the tax credit taken. (In the above example, the additional interest deduction would be $7,260.00 less $2,000.00, or $5,260.00)
MCC Program Criteria / Requirements: All mortgage loan types are eligible. The mortgage loan, available through a network of participating lenders, must be underwritten according to FHA, VA, USDA/RHS or conventional loan criteria and will be at prevailing market rates. New and existing single family homes, townhouses, condominiums and manufactured housing (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.