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The down payment assistance loan must be repaid in full if you sell or refinance the property before the 15-year term is up. Well-suited to first-time homebuyers, MassHousing offers a fixed-rate mortgage featuring MI Plus, a type of mortgage payment protection that covers the mortgage principal and interest in the event of a job loss. MI Plus covers payments for as long as six months, and up to $2,000 per month.
In its first iteration, the first-time homebuyer tax credit granted first-time homebuyers a tax credit of up to 10% of the home’s purchase price. There were also other qualifications buyers needed to meet, including citizenship, income, and residency requirements. MassHousing Loan provides low-interest fixed rate loans and mortgage payment protection. To qualify, you must meet income guidelines, have good credit, and complete a homebuyer education course.
U.S. Department of Agriculture (USDA) Loans
They could also qualify for a renewable energy source property credit or a circuit breaker credit. This last credit is part of the state’s Income Tax Reduction Program for Massachusetts homeowners. With this credit, taxpayers over the age of 65 who live exclusively in Massachusetts could receive a special credit. These credits could reduce the amount homeowners pay for real estate tax, mortgage interest or their mortgage insurance premiums.
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Massachusetts Homeownership Resources
There are a lot of different types of government grants available to first-time home buyers, and each one has its own specific eligibility requirements. Property taxes are also a great avenue when it comes to deductions. You get to write off your annual property taxes the year you pay them.
First-time homeowners can shrink their tax bill with penalty-free IRA payouts, mortgage insurance premium deductions and so much more. Of course, homeowners should keep in mind that most of these deductions are only applicable when itemized. Homeowners who take the standard deduction instead of itemized deductions will not be eligible for most of these deductions. Follow below to learn all about tax deductions and credits for first-time homeowners and state-specific programs in Massachusetts, New Hampshire and California. Of course, you can only claim these tax deductions for homeowners if you itemized deductions when you pay taxes each year. Though you can no longer take advantage of the first-time homebuyer tax credit, legislation to create a new refundable first-time homebuyer tax credit of up to $15,000 was introduced in April 2021.
Freddie Mac Home Possible Mortgages
We also explained which IRS forms they must file during tax season. From property taxes each year to real estate transfer taxes due at closing, new homeowners are often shocked by how their tax bill. However, we also pointed out the deductions, credits and other tax benefits available to homeowners. For first-time home buyers, there are even more tax breaks to take advantage of – both when filing federal taxes and state taxes.
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Kimberly Lankford and Jennifer Ortiz explain in their article “Can You Take the Home Office Deduction? In general, homeowners can only deduct interest paid on qualified HELOC debt up to $100k. As an example of how forgivable mortgages work, let’s say a first-time buyer uses a forgivable loan to make his $15,000 down payment.
MassHousing also has mortgage loans with affordable, fixed interest rates and no fees for qualified buyers. Many of the state programs that help first-time buyers with mortgage loans and down payment assistance require you to take a homebuyer education course. The homebuying process can be quite strenuous, so it’s important to identify your financial situation and determine whether you need mortgage insurance. If you don’t think you’ll be able to make a 20% down payment on your first purchase, remember that numerous home loan and mortgage options exist.
To be eligible, you must meet asset and income limits, make the required down payment, be a first-time home buyer, and meet credit and underwriting requirements. The home you are buying must be your primary residence through the life of the loan, and you need to complete a homebuyer education program. The Department of Housing and Urban Development also offers several loan and grant options for homebuyers. You’ll also want to do some research on the lenders in your area.
Thanks to the state’s MassHousing program, your dream of becoming a first-time homeowner could become a reality. It’s helped more than 90,000 Massachusettsans buy a home by providing affordable loans and down payment assistance. Ready to learn the details about all the Massachusetts homebuyer assistance programs?
But one is that your income cannot exceed 135% of the area median income. For a family of four living in Boston that is $101,050, according to the website. If you’re unsure which program to choose for your first mortgage, your lender can help you find the right match based on your finances and home buying goals.
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