VHFA recently introduced two new programs that will extend affordable home financing to more Vermonters in time for the start of Vermont’s 2014 peak “home buying season.” The arrival of spring has long been a time of heightened home buying activity in Vermont.
Mortgage Credit Certificates (MCCs), now available for qualified Vermont home buyers, will increase the long-term affordability of buying a home by reducing the amount federal taxes owed each year. A borrower using the MCC program can take up to 20 percent of the interest paid during the year on their first mortgage as a credit instead of a deduction. This provides a big boost at tax time every year that the original source of financing stays in place. The remaining 80 percent of the interest paid by the home buyer can be taken as a mortgage interest deduction. MCCs can be used in conjunction with either VHFA or non-VHFA first mortgages.
In addition to the MCC program, VHFA also unveiled a new first mortgage program called “Advantage.” This program extends VHFA first mortgages to Vermonters who don’t qualify for its traditional programs due to purchase price or income limits or first-time home buyer requirement. The Advantage program has no purchase price limit or first-time home buyer requirement and is available statewide to three or more person households with incomes up to $118,000 and up to $93,000 for single and two-person households.
“The goal of the Advantage program is to maximize the number of Vermonters with affordable fixed-rate mortgages,” explained VHFA Executive Director Sarah Carpenter. “At the same time, MCCs are a great tool for increasing affordability and we know that the market has been looking for this resource.”
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