As the housing market continues to become more difficult, new homeowners should be aware of tax credits to help with rising costs.
Many who have never owned a home may not know about the $2,000 tax credit they can claim.
This is through a mortgage credit certificate, a federal tax credit that makes it more affordable for people to buy homes.
The savings work out so that you get a dollar for dollar tax credit on your mortgage interest, which comes off of your tax bill.
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The credit can be used every year.
How much do homeowners save with this tax credit?
What you get in the form of a credit will vary by state.
The typical credit is worth 20% to 40% of what you pay in mortgage interest.
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The most you can get is $2,000 each year.
The credit can be obtained through some housing finance agencies.
Eligibility requirements to be a homeowner that qualifies
- First time homebuyer
- Moderate or low income based on the AMI
- Home purchase isn’t above a certain limit
- It’s your primary residence
- The mortgage lender you use is approved through the HFA
You can claim this credit by submitting Form 8396 with the IRS.
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