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Posts Tagged ‘MCC’


2018 Tax Reform – What Does it Mean for Homeowners?

Monday, January 22nd, 2018

Tax Reform - Mortgage Q&A

As you likely know, Congress passed a tax reform that went into law on January 1, 2018. Several provisions in the bill are directly tied to homeownership. There has been a lot of confusion and misinformation around these amended provisions, as the initial policy that the House of Representatives passed differed from what was actually put into law. While we are not tax advisors – and we do encourage you to consult with your tax advisor – we hope these answers will help clear up some confusion.

IS MORTGAGE INTEREST STILL DEDUCTIBLE?

Yes, the mortgage interest deduction remains intact for all current homeowners on mortgages up to $1,000,000 ($500,000 if married filing separately). For all new mortgages after December 14, 2017 interest will only be deductible on loans up to $750,000 ($375,000 if married filing separately).

CAN I STILL DEDUCT MY HOME EQUITY LOAN (HELOC) INTEREST?

No, in most cases interest on home equity loans is no longer tax deductible for taxable years beginning after December 31, 2017 and through December 31, 2025. There is an exclusion that may allow you to write off the interest if the proceeds of the HELOC are used to substantially improve the property. We encourage you to consult with your tax advisor.

CAN I STILL DEDUCT MY PROPERTY TAXES?

Taxpayers can deduct up to $10,000 in state and local taxes, which include property taxes. You will no longer be able to write off all of them if your state and local taxes exceed $10,000.

IS THERE STILL A CAPITAL GAINS TAX EXEMPTION ON THE SALE OF PRIMARY RESIDENCES?

Yes, this remained unchanged. Capital gains are exempt up to $250,000 ($500,000 if married) on the sale or exchange of your principal residence if you have lived in the home for the last 2 out of 5 years.

ARE MORTGAGE CREDIT CERTIFICATES (MCCS) STILL AVAILABLE?

Yes, MCCs were not impacted.

CAN I STILL WRITE OFF MOVING EXPENSES RELATED TO A CHANGE IN MY JOB?

No, job-related moving expenses are no longer tax deductible unless you are a member of the armed forces on active duty that moved due to military orders.

It’s important to note that the above tax write-offs only have value if you will be itemizing your deductions. Unfortunately, the new tax reform raised the standard deduction to $12,000 for taxpayers filing individually and $24,000 if married filing jointly. This means, many taxpayers may not be itemizing their deductions going forward.

Sources:

Tax Reform Law Chart: Prior Law vs. New Law (Published by the California Association of Realtors® on 12-28-17)

The Modified Home Mortgage Interest Deduction (Published by Forbes.com on 12-28-17)

3 Changes to Itemized Deductions Under Tax Reform Bill (Published by HRBlock.com on 12-22-18)


Government Homebuyer Stimulus –

More Generous than Last Year’s $8000 First-time Homebuyer Tax Credit!

Wednesday, August 24th, 2011

The Sacramento Housing and Redevelopment Agency has allocated new funds for the Mortgage Credit Certificate (MCC) program. What does that mean for first-time homebuyers? Well, if you purchase a $225,000 home and plan to live in the home for at least the next three years, with the tax credit savings you receive from the MCC, you will have gotten more than $8000 in stimulus money!

Here is an overview of the program and how it works:

    First-time Homebuyer

  • Provides a 20% tax credit on the interest of your mortgage (this is in addition to the other tax benefits you receive when you purchase a home)
  • You must be a first-time homebuyer
  • You must live in the home (you can only receive the tax benefits as long as you live in the home, but can receive the tax benefits for the life of the loan as long as you still live there)
  • Reserved for areas around Sacramento (contact me for a full list of eligible areas)
  • There is a $250 application fee to take advantage of the program
  • To take advantage of the MCC program, your household income must fall below these limits:
    • 1 to 2 Person Household – $75,100
    • 3 or more Person Household – $86,365

Contact me today, to learn more about the MCC program and the benefits for you, and to determine your eligible.

Photo of John Easterbrook

John Easterbrook
(916) 486-6969
jeasterbrook@teamvitek.com
Licensed – NMLS # 226555


More Generous than Last Year’s $8000 First-time Homebuyer Tax Credit!


Bounce Back and Buy a Home Again…
…Quicker Than You Might Think!

Friday, May 27th, 2011

Losing a house through a short sale or foreclosure doesn’t have to mean the end of the road to purchasing a home again. You may be able to bounce back and buy a home once again quicker than you think!* In fact, if you haven’t owned a home in the last 3 years, you might even be eligible to purchase a home as a ‘first-time homebuyer’ and only need 3.5% down*!

Depending on your particular situation the following time frames must pass in order to be eligible for a new home loan*:

Previous Short Sale

3 Years to apply for an FHA
1 Year to apply for a VA
2 Years to apply for a Conventional*

Previous Foreclosure

3 Years to apply for an FHA
2 Years to apply for a VA
7 Years to apply for a Conventional

In all cases, satisfactory re-established credit must be shown. There are sometimes exceptions on the above restrictions when there has been a life event that has occurred, allowing for shorter time frames to qualify. A life event would be considered a death, but would not include a job loss or divorce.

In addition, you may also qualify for a Federal Income Tax Credit* based on a percentage of the mortgage interest paid each year.

Contact me today for a personal qualifying and planning evaluation!

Photo of Jennifer Remedios

Jennifer Remedios
(916) 486-6954
jremedios@teamvitek.com


* Restrictions apply. Not all borrowers will qualify. This is not a commitment to lend. Program guidelines may change without notice. VITEK Mortgage Group always encourages you consult the advice of a tax professional for tax related programs. VITEK Mortgage Group is licensed by the Department of Corporations under the California Residential Mortgage Lending Act.


New Program Reduces Federal Income Tax a Homebuyer Pays!

Monday, August 9th, 2010

New money is now available for the SHRA MCC program. This program blows away the $8,000 First-time Homebuyer Tax Credit, if the borrower keeps the loan in place for more than five years as an owner occupant.

The Sacramento Mortgage Credit Certificate (MCC) Program is designed to provide homeownership assistance on home purchases within the cities of Sacramento, Elk Grove, Folsom, Isleton, Galt, Citrus Heights, Rancho Cordova and the County of Sacramento. The MCC reduces the amount of Federal income tax a homebuyer pays, thus giving more available income to qualify for a mortgage loan and to make monthly mortgage payments. This new allocation won’t last very long, so take advantage of it while you can. Below are a few keep points on the MCC loan program.

Program Features:

      • 20% Mortgage Credit Certificate – a tax credit of 20% of the annual mortgage interest paid (amount of the credit cannot be more than the annual federal income tax liability after all other credits and deductions have been taken into account)
      • MCC will be in effect for the life of the original mortgage loan provided property remains owner occupied
      • MCC may be reissued one time, upon the first refinance of the original mortgage loan
      • MCCs may be used with conventional loans, fixed-rate or adjustable loans, FHA and VA loans (MCCs are not available with bond-backed loans such as CHFA or Cal-Vet)
      • 40 percent of an MCC allocation is reserved for households whose income does not exceed 80 percent of the area median adjusted for family size

Eligible Applicants Include Homebuyers:

      • Who are first-time homebuyers (have not owned and occupied a home as a principal residence within the preceding three years) (in federally designated target areas, you do not have to be a first-time homebuyer)
      • Able to qualify for a loan to purchase the home
      • Who will live in the home being purchased
      Who do not exceed the following income limitation:
        • 1 or 2 person household $73,100 (non-target areas) $87,720 (target areas)
        • 3 or more person household $84,065 (non-target areas) $102,340 (target areas)

Eligible Properties Include:

      • Single family homes that are located within the cities of Sacramento, Elk Grove, Folsom, Isleton, Galt, Citrus Heights, Rancho Cordova and the unincorporated areas of the County of Sacramento.

        Maximum purchase price limits:

            • New and Existing Homes $506,795 (non-target areas) $619,417 (target areas)

Contact me for more information or a list of federally designated target areas.

Photo of John Easterbrook

John Easterbrook
(916) 486-6969
jeasterbrook@teamvitek.com