Kentucky Home Buyer Tax Credit - KHC Home Buyer Tax Credit

By
Real Estate Broker Owner with Lizette Realty - Lexington KY - Richmond KY

Kentucky Home Buyer Tax Credit - KHC Home Buyer Tax Credit 


Kentucky Home Buyer Tax Credit

What is KHC Home Buyer Tax Credit?

For some time, new Kentucky home buyers have not been aware that there still is a program available to give them a tax credit. The KHC Home Buyer Tax Credit is just the thing they need to see great savings on their yearly IRS tax returns.

KHC Home Buyer Tax Credit is available through Mortgage Credit Certificates (MCC), which reduce the amount of federal income tax you pay, giving you more available income to qualify for a mortgage loan.  MCCs are NOT mortgages.  They are tax credits that put extra cash in your pocket each month, so you can more easily afford a house payment.  That means fewer tax dollars will be withheld from your regular paycheck, increasing your take-home pay. 


KHC Home Buyer Tax CreditThe federal government allows every homeowner an income tax deduction for all the interest paid each year on a mortgage loan. 

But an MCC gives you a tax credit of 25 percent (not to exceed $2,000). 

You can still deduct the remaining 75 percent interest on your income taxes. 

A tax credit is not the same as a tax deduction.  A tax deduction reduces the portion of your income that is taxed, so you pay less. 

 

A tax credit is a direct, dollar for dollar reduction in the total tax you owe. 

The MCC is effective for the life of the loan as long as you live in the home.  If you sell your home in the first nine years of ownership, you may be subject to Federal Recapture Tax.

MCC Brochure 

Eligibility to apply

You may qualify for the KHC Home Buyer Tax Credit program if:

  • You are purchasing your first home.
  • You have not owned a home in the last three years.
  • The home you wish to buy is located in an area of the state which is exempt from the first-time home buyer rule.  (Your local lender can determine those “targeted areas.”)

Maximum home sales price is $243,000.

Maximum income limits:

     1-2 person household : Up to $83,400

     3-4 person household : Up to $97,300

You must meet lender, KHC, FHA, VA, RHS, Fannie Mae, and/or Freddie Mac standards for creditworthiness.  You must occupy the property.

It cannot be used for business, commercial, or rental purposes. 

Applicants need a sales contract with a legal description of the property, a $500 MCC fee, and copies of federal income tax returns for the past three years.

How to Apply?

Applications for KHC Home Buyer Tax Credit are accepted on a first-come, first-served basis by a statewide network of local lenders.  MCCs are available with FHA, VA, RHS, Fannie Mae, and Freddie Mac Conventional 30-year mortgages at a fixed-rate.  MCCs cannot be used with KHC’s Mortgage Revenue Bond program, but may be used with KHC’s GNMA Secondary Market Program.  Your local lender will submit your loan application and notify you as to whether your application has been accepted. 

With an MCC from KHC, you will get direct dollar-for-dollar reduction in your federal taxes worth 25 percent of the interest you pay on your mortgage each year.  You can still claim the remaining 75 percent of the interest as a tax deduction.

 

Check in With Amy Heiden of Century Mortgage to find out more about the KHC Homebuyer Tax Credit.

 

 

Finding a new Kentucky home has never been so easy!

 Just click on the links below.

 

RICHMOND KY HOMES FOR SALE

 

Lexington KY Residential Homes For Sale

 

 
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Lizette Fitzpatrick - Principal Broker at Lizette Realty.

  For more information on Lexington or Richmond KY homes for sale. click on Lizette.us.

  Copyright © 2012 By Lizette Fitzpatrick, All Rights Reserved 

Kentucky Home Buyer Tax Credit - KHC Home Buyer Tax Credit 

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Location:
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