Steamboat Pilot & Today

Steamboat Springs — The Yampa Valley Housing Authority has $3 million in grant funds available to local homeowners for mortgage credits.

Elizabeth Black, executive director of the Housing Authority, said a program offered through the Internal Revenue Service and the Colorado Housing and Finance Authority is available to eligible households who are in the home-buying market.

Mortgage Credit Certificates help low- to moderate-income buyers by providing a significant tax credit for new homeowners, she said. Routt County and the Housing Authority are co-sponsors of the program, which received $4 million in mortgage credits last year. Black said about $3 million of those credits are still unused. Based upon an average home price of $300,000, she added, there are roughly 10 certificates that don't have names on them.

"We are hoping with this springtime home-shopping season, eligible buyers look at the income benefits generated by this program," she said.

The credits create an additional refund of federal income tax, or a reduction in the amount owed to the IRS. The mortgage credit program provides recipients with an additional tax credit - of up to 20 percent of the interest on their mortgage - when they file their taxes.

"For example, if people pay $12,000 a year in mortgage interest, this program would generate up to an additional $2,400 credit on annual federal income taxes," Black said.

Most middle class tax filers can deduct their mortgage interest on their federal taxes.

"It's a very simple process," Black said. "Homeowners attach a copy of the MCC certificate with their annual federal tax return and the credit is applied."

In order to be eligible for the program, households of one or two people must earn less than $72,700. Households of three or more people must earn less than $83,605. The maximum home purchase cannot exceed $358,200, and the home must be in Routt County.

Only first-time homebuyers are eligible. Mobile home purchases do not qualify, and the program is not applicable to refinancing. The certificate lasts until the owner refinances the home with another mortgage or when the home sells, Black said.

The program is scheduled to expire in fall 2008 - meaning there is time for homebuyers to plan for next spring's tax season.

"Before YVHA considers a new application for more credits, we need to use our allotment up," Black said.