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PHFA launches mortgage credit program

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Responding to changing market conditions, the Pennsylvania Housing Finance Agency last week announced the creation of a mortgage credit certificate program, which will provide a limited tax credit to eligible homebuyers.

The MCC allows qualified buyers to claim a tax credit that reduces, on a dollar-for-dollar basis, their federal income tax liability, if any, for the life of the loan.

Homeowners can claim up to 50 percent of the mortgage interest they pay each year, not to exceed $2,000, according to PHFA. The remaining mortgage interest paid may be claimed as a deduction per Internal Revenue Service guidelines.

The program is open to first-time buyers and eligible veterans who meet income and home purchase price limits, according to PHFA. Those vary by county.

For example, the purchase price limit in Cumberland County is $247,000. The income limit is $72,500 for one- and two-member households; $83,300 for households with three or more people. See the attached program document for more information.

There also are qualifying requirements of a PHFA mortgage loan that need to be met.

The program provides this benefit as long as the home remains the owner's primary residence, according to PHFA.

"Our (MCC) program is yet another initiative by PHFA to help Pennsylvanians achieve their dream of homeownership," said Brian Hudson Sr., PHFA's CEO.

More buyers in the market could mean more opportunities for builders, according to PHFA.

"It may be just the extra help young homebuyers need to make that home purchase happen," said Scott Miller, a PHFA spokesman. "Over the 30-year life of a mortgage, we're talking about some significant dollars recaptured by the homebuyer using the MCC program. This should help move more homes, and that helps everyone in real estate and the homebuilding industry."

Eligible borrowers also could qualify for down payment and closing cost assistance from PHFA's Advantage Loan program.

Click here to download a PDF file about the PHFA tax credit program.

Jason Scott

Jason Scott

Jason Scott covers state government, real estate and construction, media and marketing, and Dauphin County. Have a tip or question for him? Email him at jasons@cpbj.com. Follow him on Twitter, @JScottJournal. Circle Jason Scott on .

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