MSHDA Federal Tax Credit Calculation

We had Eric Dusenbury recently provide a Realtor Lunch and Learn with one of our offices. While we have covered the down payment assistance in an interview with Kevin Elsenheimer the former Executive Director of MSHDA. This time Eric talks about the opportunity for people to take advantage of a little know MSHDA Federal Tax credit:

Dave: Hi everyone Dave Sullivan here from mortgage 1 with special guest……

Eric: Hello everyone I am Eric Dusenbury a business development specialist for MSHDA’s Homeownership division.

Dave: Thanks for coming out we have covered some of the great work MSHDA does with down payment assistance for home buyers but I wanted to have you on today to talk about a relatively new program you have regarding a federal tax credit can you tell us a little bit about that.

Eric: MSHDA’s Federal Tax credit the MCC program is designed to stimulate home buying. Statewide the Realtor community has been very interested in the program and it can offer tremendous savings for eligible homebuyers. The program is set up as a federal tax credit that can be up to 20% of the borrower’s annual mortgage interest which can be a pretty large number. One of the best features of the program is that it runs for the life of the loan so the potential savings could be substantial.

Dave: Follow up question about the program (How much money could a borrower potentially save?)

Eric: Answer dependent on the loan size and interest it could exceed $20,000.

Dave: So what company has been the number one provider of MSHDA loans for the last 4 years straight?

Eric: Mortgage 1 has been the number one lender for our Down Payment assistance program and our Federal Tax Credit program the MCC over that last several years.

Dave: Besides contacting Mortgage 1 where can people go for more information?

Eric: www.michigan.gov/mshda

Dave: thank you

MSHDA Federal Tax Credit

Calculating MSHDA’s Federal Tax Credit.

Total Mortgage Amount x Loan Interest Rate = Annual Interest
Annual Interest x MCC Rate (20%) = Tax Credit for the Year
Assuming a mortgage of $100,000 at 5.5% interest, the annual tax credit would be:
$100,000 x 5.5% = $5,500
$5,500 x 20% = $1,100 annual tax credit

Mortgage Credit 191-090303 Certificate Program