Ohio Mortgage Credit Certificate is a product that is backed by the federal authorities which helps families realize their dream of owning a home. The Ohio Mortgage Credit Certificate program provides a tax deduction which reduces the amount of tax liability that a home buyer remits to the deferral authorities hence making money available which can be used to offset the mortgage loan.
How Ohio Mortgage Credit Certificate Works
Homeowners who qualify for the program get a mortgage-credit -certificate from Ohio HFA which can be used towards reducing the amount of tax burden that is payable every year for the entire life of their mortgage loan. With MCC, a percentage of the mortgage interest that you pay becomes the tax credit which can be deducted on dollar to dollar basis from your tax obligation or liability at the end of the year. Provided that you have sufficient tax liability on your mortgage interest, you can be pretty sure that you will continue claiming the tax credits.
But to qualify for Ohio Mortgage Credit Certificate tax credits, the buyer must meet certain conditions – he or she must be a first time home buyer and must have not owned any home for the last three years. The home to be bought should be within a listed area because homes that are situated in certain areas qualify. The borrower of the house loan must occupy the house as a primary residence for all the years where the Ohio Mortgage Credit Certificate claims are to be made. Moreover, it’s important that the borrower’s income limit be within the prescribed limits. The properties that qualify for the mortgage are new or existing family-units or planned units within the state of Ohio, modular, manufactured or other properties that are permanently fixed on the ground. The house must remain owner occupied for the entire 30 years when the loan is being amortized.
If you’re a low to moderate income, reside in Ohio, cannot afford down payments for the house you wanted to buy, you may qualify for Ohio down payment assistance programs. Down payment financing agencies also give monetary assistance to those who already have a lot but wanted to build a home, or if they wanted a mobile home for their lot or a mobile home to be placed in designated parks.
Aside from the income category requirement, the Ohio down payment assistance programs also give priority to active military personnel, veterans, senior citizens, people with disability, people who do not have a home, or who have not owned a real estate. They do not discriminate the borrower even they are of different race, color, religion, sex, physical ability, among others, which make the program very borrower-friendly. Borrowers should undergo seminar or training on housing programs being offered by the US government, so they will know their responsibilities as homeowners, as well as their duties as borrowers.
The Ohio down payment assistance program has very affordable interest rate, and they will grant a 2.5% to 3.5% of the total amount of your loan. Loans are set on your preferred payment modes, and have low closing costs. It is being monitored and regulated by the Federal Housing Administration and is insured to it for the safety of the borrower. It is the U.S Department of Housing and Urban Development’s program in cooperation with private house financing agencies, to provide affordable homes for Ohio residents, and for other states as well.
There are four main types of Ohio down payment programs:
Loans that are similar to second mortgages that have to be paid at the same time as your first mortgage.
Second mortgages that are paid when you move, sell, refinance or finish paying your first mortgage.
Second mortgages that are forgiven over a set number of years or payments.
Grants or monetary gifts that never have to be repaid.
Ohio Down Payment Assistance Programs
Your Choice! Down Payment Assistance allows homebuyers to choose either 2.5% or 5% of the home’s purchase price. Assistance can be applied towards down payments, closing costs or other pre-closing expenses. This assistance is forgiven after seven years. If you sell or refinance your home within seven years, you must repay all of the assistance provided.
Regardless of which type of down payment program, you will first need a mortgage. Below are mortgages that require low or no down payments:
No Down Payment Mortgages – mortgages that require no down payment
USDA Rural Loan – the purpose of the Single Family Housing Direct Home Loan is to assist low- and very-low-income applicants obtain decent, safe and sanitary housing in eligible rural areas by providing payment assistance to increase an applicant’s repayment ability. There is no down payment. Payment assistance is a type of subsidy that reduces the mortgage payment for a short time. The amount of assistance is determined by the adjusted family income.
VA Home Loan – VA helps Service members, Veterans, and eligible surviving spouses become homeowners. As part of our mission to serve you, we provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy. There is no down payment as long as the sales price doesn’t exceed the appraised value.
Low Down Payment Mortgages – mortgages that require up to 3.5% down payment
FHA Mortgage Loan – the purpose of the FHA Home Mortgage Loan is to provide mortgage insurance for a person to purchase or refinance a principal residence. The mortgage loan is funded by a lending institution, such as a mortgage company, bank, savings and loan association and the mortgage is insured by HUD. A down payment of just 3.5 percent is required and may consist entirely from “gift funds.” The credit score requirement is 580.
Home Possible® Advantage Mortgage – the purpose of the Home Possible® Advantage mortgage by Freddie Mac is to offer low down payments for low- to moderate-income homebuyers or buyers in high-cost or underserved communities. Down Payment can come from a variety of sources, including friends and family, employer-assistance programs and secondary financing.
The HomeReady™ Mortgage – the purpose of the HomeReady™ mortgage by Fannie Mae is to provide flexibility for applicants buy home with down payments as low as 3%, below market mortgage rates, co-borrower flexibility, additional income sources and reduced mortgage insurance costs.
More places to find assistance on down payment:
The US Department of Housing and Urban Development (HUD) offers the following programs:
The Good Neighbor Next Door Program was created by U.S. Department of Housing and Urban Development (HUD) to help law enforcement officers, pre-Kindergarten through 12th grade teachers, firefighters and emergency medical technicians buy homes. The biggest benefit of the Good Neighbor Next Door Program is the 50% discount of the home’s list price. The only catch is that the home owner must commit to live in the property for 36 months as their sole residence.
To learn more about the Good Neighbor Next Door Program, click here.
The Section 184 Indian Home Loan Guarantee Program is a mortgage for American Indian and Alaska Native families, Alaska villages, tribes, or tribally designated housing entities. In 1992 Congress created this program to help Native American Communities with homeownership.
Section 184 loans helps borrowers buy homes with a low down payment and flexible underwriting. Moreover, the loan does not need to be used only on properties on native lands. Purchase of an existing home for single-family residences. Also allowed are new construction, rehabilitation, and refinance.
Ohio housing agencies are your best resource for down payment assistance programs. Through funding from HUD, the purpose of these agencies is to ensure that affordable housing is available for everyone.