December 21, 2014

New tax credit created for first-time home-buyers

Iowa Finance Authority director Dave Jamison

Iowa Finance Authority director Dave Jamison

The Iowa Finance Authority is offering a new tax credit for new homeowners who fall under limits on annual income and the purchase price of their home. Iowa Finance Authority director Dave Jamison says it’s a credit linked to the mortgage interest new homeowners are paying.

“Yet another way that Iowans who meet our program guidelines can experience the many benefits of home ownership,” Jamison says.

Jamison’s agency was created in 1977 to help provide down-payment assistance to first-time homebuyers. With today’s incredibly low-interest rates, however, there’s been less demand for assistance. Jamison used untapped Iowa Finance Authority funds to create these “Mortgage Credit Certificates.”

“This program will allow eligible Iowans to purchase a home and reduce their federal income tax liability by up to $2000 per year for the life of the mortgage,” Jamison says. “Through the program, 50 percent of the eligible homeowner’s mortgage interest becomes a tax credit that can be deducted, dollar for dollar, from federal income tax liability. This program will allow Iowa families to keep more of their hard-earned income and that income will stay right here in the Iowa economy.”

Eligibility guidelines are different for each Iowa county. In the state’s largest county, Polk County, a couple with an annual income of up to $75,000 could qualify for the credit on a home that was purchased for $250,000 or less.