The new income limits were released by the U.S. Department of Housing and Urban Development and are based upon the state's median income. Homebuyers can earn up to $110,400 in urban areas and $103,040 in rural areas, depending on family size and location.
The new higher income limits benefit participants in the MCC program, which provides a tax credit to reduce the amount of federal taxes owed by a percentage of the annual mortgage interest paid each year. The remaining annual interest may be claimed as a mortgage interest deduction on the homebuyer's federal tax return.
Qualified homebuyers will receive a larger federal tax break or tax refund each year or benefit from immediate savings by updating the withholdings on their W-4 form.
MCCs may be paired with AHFA's Step Up program or any conventional fixed-rate, FHA, VA, Rural Development, and privately insured mortgages.
If you have any questions about this information, please contact Brian Hunt at bhunt@ahfa.com.
