1st Time Iowa Home Buyers to Reduce Federal Tax Liability

 OFFICE OF THE GOVERNOR

Governor Terry E. Branstad Lt. Governor Kim Reynolds

FOR IMMEDIATE RELEASE: Monday, January 7, 2013

Contact: Governor’s Office 515-725-3518

Ashley Jared, Iowa Finance Authority 515-725-4934

Branstad, Reynolds Announce New Program that will Allow Iowa Home Buyers to Reduce Federal Tax Liability

Mortgage Credit Certificates may provide Iowa home buyers with up to $2,000 in annual federal income tax credits

(DES MOINES) – Gov. Branstad and Lt. Gov. Reynolds were accompanied by Iowa Finance Authority Executive Director Dave Jamison today to announce that eligible Iowans can now buy a home and reduce their federal income tax liability by up to $2,000 a year for the life of their mortgage. The Take Credit! Mortgage Credit Certificate program is available as of January 1, 2013 and approximately 1,000 Iowa home buyers may benefit from the program. The program is administered by the Iowa Finance Authority, (IFA).

“Iowa home sales are currently up by more than twelve percent over 2011, according to the Iowa Association of Realtors and today’s announcement of another resource for Iowa home buyers supports an even greater uptick in home sales, and that is good news for Iowa,” said Branstad. “The Take Credit mortgage credit certificate program will provide an added incentive for Iowans to purchase a home, which leads to a healthy, stable economy and also provide Iowa families to keep more of their hard-earned income, income that would otherwise be spent on federal income taxes.”

After an eligible homeowner has closed a mortgage loan with an IFA Take Credit! Participating Lender, IFA will issue the homeowner a mortgage credit certificate for pre-approved applicants. The homeowner in turn may apply the credit against their federal income tax liability on an annual basis for the life of their mortgage. The credit may be claimed on IRS Form 8396.

“Through the program, fifty percent of eligible homeowners’ mortgage interest becomes a tax credit that can deduct dollar-for-dollar from federal income tax liability,” said Reynolds. “For example, a family with a $70,000 four percent fixed interest, thirty year mortgage would receive a tax credit of $1,388.78 in the first full year of homeownership. I encourage Iowans to look into this valuable resource provided by the Iowa Finance Authority.”

Eligible home buyers must be approved for a mortgage and meet federal requirements, including income limits, maximum home sale price, limited prior homeownership interest and purchasing the home as a primary residence.

What this means:

Mortgage Credit Certificate

TAKE CREDIT!

The Iowa Finance Authority announces a new Mortgage Credit Certificate Program, effective January 1, 2013, for eligible home buyers to reduce their household’s federal tax liability every year for the life of their mortgage.A percentage of the homeowners’ mortgage interest becomes a tax credit that can be deducted dollar-for-dollar from federal income tax liability, up to a maximum of $2,000 annually.

Eligibility

  • Applicants must meet Iowa Finance Authority income limits, which vary by county.
 Non- Targeted COUNTY WIDE 1-2 Person 3+ Person All HH Sizes

 BENTON

$70,579 $81,166 $97,020
IOWA   70,859  81,488   95,060
  LINN   71,000  81,650   99,400
  • The purchase price of the home may not exceed $305,000 if located in a Targeted Area or $250,000 if located in a Non-Targeted Area.
  • The home must be located in Iowa.
  • The home buyer must meet one of the following: be a first-time home buyer, purchase a home in a Targeted Area, or be a military veteran who has not previously used a mortgage revenue bond program.

Application Process
1. Visit an Iowa Finance Authority Take Credit! Participating Lender and apply for the Take Credit! program when applying for your mortgage.
2. Pay the Take Credit! application fee.
3. Upon approval, you will receive the Mortgage Credit Certificate in the mail after closing.
4. Submit a copy of the Mortgage Credit Certificate with your tax documents each year to claim the tax credit.

Be sure to contact me today!!