Little-Known Program Helps Middle- to Upper-Income Kitsap Residents Buy Homes

By Rachel Pritchett

The famous $8,000 tax credit for first-time home buyers is long gone, but there are homebuyer incentive programs floating around that continue to offer huge tax breaks.
If only people knew about them.
Consider the obscure Mortgage Credit Certificate Program of the Washington State Housing Finance Commission.
Aimed at middle- and even upper-income prospective homebuyers, it offers a tax credit equal to 20 percent of the yearly interest paid or accrued on a mortgage. That’s year after year for the life of the loan.
Certainly nothing to sniff at.
Only two homebuyers in Kitsap County used the program in the last year, and only another two applications are in the works.
Here’s how it works:
Say you take on a $200,000 mortgage and pay $10,000 a year in interest. That’s a $2,000-a-year credit at the front end of the loan, when most interest is paid.
And yes, homeowners can still deduct home mortgage interest on their taxes. The amounts will be less, but the tax credit still puts them in a better spot.
“It’s a huge benefit,” said Dee Taylor, the director of the Housing Finance Commission’s home-ownership division. She has intimate knowledge of the program’s details, since she wrote them.
In Kitsap County, qualifying buyers can’t earn more than $90,000, which includes many of us middle- and even upper-income people.
The home price can’t be more than $335,000 in Kitsap. You can get plenty of home for that here. After all, the median home sales price is only $265,000 in Kitsap.
Watch out, these numbers can change. Check www.wshfc.org/buyers/MCCCprogram.htm for updates.
New and used homes, and even manufactured homes, qualify. Rentals don’t.
If there is a downside to this little-trumpeted program, it’s that homebuyers have to live in the homes they purchase. That’s to prevent abuse like flipping that used to be so popular.
Plus, it costs homebuyers $650 to sign on.
And, there’s the possibility of homeowners having to pay the government “recapture fees” if the homes are sold within 10 years at appreciated prices and the homeowners’ incomes have increased substantially. Uncle Sam wants to share in your good fortune. Those recapture fees aren’t required the vast majority of time, Taylor said.
The program has been offered on and off in Washington since the mid-1980s. It’s on a first-come-first-served basis.
Not a lot of lenders participate, and for the life me I can’t figure out why.
If I’ve gotten your interest, here are the lenders with a local presence who are signed up: Bank of America, Eagle Home Mortgage, Golf Savings Bank, Guild Mortgage Co., PrimeLending and Wells Fargo Home Mortgage.
If your favorite lender isn’t one of these, insist they sign on by contacting the finance commission. Taylor said the commission is looking for more lenders to participate.
Hey, even for us middle-income people, getting into a home is tough. This makes it a little easier.
“It’s to help people to be able to purchase a home,” Taylor said.
This item first appeared on reporter Rachel Pritchett’s blog, Kitsap Business and Economy. For more, go to pugetsoundblogs.com/kitsapbusiness.