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What We Offer Home Buyers
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If your income or the need for down payment assistance has kept you out of the housing market, our home buyer programs can give you the boost you need.
- N.C. Home Advantage Mortgage™ offers competitive interest rates along with down payment assistance up to 5% of the mortgage loan amount – fully forgiven after 15 years – for first-time and move-up buyers.
- Mortgage Credit Certificate (MCC) enables first-time buyers to save up to $2,000 a year on their federal taxes.
Both are offered statewide through participating lenders.
N.C. Home Advantage Mortgage™
Available with 30-year, fixed rate FHA, VA, USDA and conventional mortgages, the N.C. Home Advantage Mortgage™ is a perfect match for buyers looking for safe, affordable financing. The mortgages offer competitive interest rates and can be applied for through participating lenders, which operate nearly 700 branch offices across the state.
Need Down Payment Help?
If you need help with the down payment and closing costs, you may qualify for interest-free, deferred, forgivable second mortgages up to 5% of the first mortgage loan amount.
Repayment is required only if you sell, refinance or transfer the home before year 15 of the loan – the down payment assistance is forgiven at 20% per year after you live in the home for 10 years, and fully forgiven at 15 years.
Am I Eligible?
You may be eligible for an N.C. Home Advantage Mortgage™ if:
- you are buying a new or existing home
- you are a first-time or move-up buyer
- you buy a home in North Carolina and occupy it within 60 days of closing
- your annual income does not exceed $85,000
- you are applying for a FHA, USDA, VA or conventional loan through a Participating Lender and meet the sales price limits of the loan type
- you are a legal resident of the United States, and
- your credit score is 640 or higher.
What Properties Are Eligible?
- New and previously owned single family homes
- Manufactured Homes (only new, never occupied, doublewide or greater manufactured homes on permanent foundations)*
*These property types are only available for FHA, VA and USDA loans, not conventional loans.
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Mortgage Credit Certificate (MCC)
If you are a first-time buyer and meet certain income and sales price limits, you may be eligible for a Mortgage Credit Certificate (MCC) worth up to $2,000 a year in tax savings. This federal tax credit can lower your income-tax liability, dollar-for-dollar, leaving you more money to use toward your mortgage. If you qualify, you will be able to claim 30% of the interest you pay on your mortgage if you purchase an existing home or 50% of the interest for a new home (never occupied) – up to $2,000 for every year you live in your home – as a tax credit on your federal income taxes.
MCCs can be combined with the N.C. Home Advantage Mortgage™ – increasing the savings on your new home – as well as with any other qualifying lender mortgage program, including some adjustable rate mortgages. Contact one of our participating lenders to find out if you are eligible – if so, the lender can submit your reservation.
How does it work?
Suppose you qualify for an MCC and obtain a 30-year, 4% fixed-rate mortgage of $97,000 for the purchase of an existing home (not new construction). The first year’s interest payment is approximately $3,880. The MCC allows you to take a federal income tax credit of $1,164 ($3,880 x 30%) for that year.
If your federal income tax liability is $1,164 or more after you have taken all other credits and deductions, you receive the entire benefit of the MCC tax credit – $1,164. In figuring your taxes, you also claim a deduction for the remaining 70% of your mortgage interest.
If your federal income tax liability is less than $1,164—for example, $800—your tax is reduced by only $800 that year. However, the remaining credit can be claimed on tax returns for the next three years, if tax liability increases. Note that depending on your individual tax situation, the MCC may not always provide a tax credit benefit to you in a given year depending on your overall tax liability.
You can receive an immediate benefit from your MCC tax credit by filing a revised W-4 (Employee’s Withholding Allowance Certificate) with your employer. In this example, your federal income tax liability would be reduced by $97 a month ($1,164 ÷ 12). The extra $97 increases your take-home pay and helps make your house payments affordable.
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