RSS
Home
Foreclosure: The Mortgage Credit Certificate Program
Print
Email
RSS
Subscribe
Last summer, before the Wall Street Bailout (or Troubled Assets Relief Program) was passed by Congress, another law was enacted. This law was called The Housing and Economic Recovery Act of 2008. This Act made its way through Congress before any of us knew how much trouble we really were in. Now that money is making its way to you.
The City of Denver is taking the 25 million dollars available to it through the Act and is putting together a Mortgage Credit Certificate Program to help homeowners avoid foreclosure. There is a second part of this program--to help people who want to buy foreclosed homes--but right now, we will focus on the portion of this program geared to prevent foreclosure.
How it works
The Program is being set up in conjunction with a group of lenders, such as banks, mortgage companies and credit unions. You will be able to go to one of these participating lenders and arrange for a refinance of your home loan. Because your new loan is made through the Program, you will get a tax credit for a portion of the interest paid under the new loan. This tax credit is a dollar-for-dollar reduction of your taxes.
Example
If you paid $10,000 in interest under the new loan your mortgage credit certificate would give you a tax credit of $2,000 (approximately 20% of your interest charges would be eligible for the Mortgage Credit Certificate). The remaining $8,000 of your interest—the portion not affected by the tax credit--would still be eligible for the usual itemized deduction. If your tax rate is 20%, you would reduce your taxes by an additional $1,600. The two together would reduce your tax bill by $3,600. Without this Program, your tax deduction on the full amount of interest paid would be $2,000. In this example, the savings to you with the program is $3,600, without it, it’s $2,000.
Bottom line
You save a lot on your taxes.
According to Beth Truby, Coordinator of Neighborhood Stabilization, the City of Denver has taken the initiative in this State to put together such a Program. The Denver Office of Economic Development is working hard to get the Program up and running by May of this year.
In these times when astronomical figures are thrown around like Frisbees, it is fair to say that $25,000,000 just doesn’t go as far as it used to. The Program administrators will have to balance the amount of money available with the number of people in need. Yet, if you are under the yoke of a high interest loan or sub-prime mortgage now, this Program will be looking for you.
Keep your eyes and ears open. As May approaches you will be hearing a great deal more about this.
For more info: Go to The Denver Office of Economic Development website www.milehigh.com for updates to the Program
Related Articles:
Add a Comment
So what makes somebody a reasonable person, anyway? Like it or not, there are some requirements to being reasonable. We expect a reasonable person to …
We’ve all heard of the reasonable mistake, (like shouting hello to a stranger who looks just like an old friend) or the reasonable accident …
