Government Tax Breaks That Can Make Buying A Home For The First Time Easier

• Author: Chris Remington
• Posted: 2024-02-28

States across the country are always trying to promote programs and policies to give incentives to people who are looking to buy their first games. Almost all of the states in America offer some of the other forms of incentives meant to encourage people. These incentives are intended to reduce the overall cost of buying a home, to make it more accessible to younger people and first-time buyers. There are of course certain restrictions and guidelines that fall under the provisions that the governments of each state set.

The Mortgage Credit Certificate Program

The Mortgage Credit Certificate Program is exclusive to the state of California. According to this program, the government allows first-time buyers to subtract twenty percent of the total amount of the mortgage that people take on. This amount is taken directly from their taxable amount, which means that they have more disposable income that they can then invest in buying a home for themselves. It also allows you to show additional income that can help you seek a better loan while buying your home. Furthermore, the tax credits that are gained from this are applicable for every subsequent year, so long as you continue to live in the same house and are still paying back the loan that you took. The entire program is regulated by the California Housing Finance Agency.

The Down Payment Assistance Program

In addition to The Mortgage Credit Certificate Program, the state of California also has Down Payment Assistance Programs to make the process of paying back the loan for your first home a lot easier. These assistance programs are great for anyone who is trying to cut back on the amount that they pay back for the loan and the amount that they would, in total, pay for their home. This program works by loaning around 3.5% of the entire loan to the homeowners, which then has to be paid back only after they have paid off their full loan, or if they have sold the home that they had taken the initial loan for. When combined with the Mortgage Credit Certificate Program, it can significantly reduce the cost of owning a home, which has proven to be a great incentive to allow first-time buyers to get the home that they have always wanted.

Extra Credit Teacher Home Purchase Program

This program is only for teachers who are also looking to buy a home for the very first time. This includes teachers who are working in any educational institution and also includes the support staff working in these schools. This applies to only those who are teaching at a school in California but can be used to buy a home in any other part of the country. This program loans teachers an amount between $7500 to $15000, which then allows them to use the loan to make the down payment on the home that they are looking to purchase. This program once again works similar to the Down Payment Assistance Program, where you do not pay back any amount of the loan until you have paid back the mortgage you took for your home or sold the house entirely.

Mortgage Interest Deduction

This is one of the most commonly used tax exemption tools to help first-time buyers with the process of buying their own home. This allows the user's to deduct a certain amount of interest that the person pays, per month, on the loan that they have taken. When paying back a loan in monthly installments, the interest makes up a good portion of the amount that is payable. This policy reduces that interest, thereby reducing the overall amount that you will have to pay per month. This is probably one of the most useful kinds of programs that come to the aid of people who are looking to buy a home for the very first time.

Who Is Eligible

Those who are looking to buy a home for the very first time are the ones eligible for these programs and can seek assistance from them. However, a person who has previously purchased a home is also eligible for this if they sold their home three years before applying for these programs. The person must also not currently own any property in any part of the country.