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Housing Commission offers tax incentives in rural areas

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The Missouri Housing Development Commission announced Aug. 20 it has expanded the Mortgage Credit Certificate program to allow any first-time home buyer to receive a federal income tax credit when buying a home in a rural area.

According to a news release from the commission, the program is now open to anyone purchasing a home in a rural area previously it was limited only to the purchase of newly constructed homes in rural areas.

The federal tax credit allows rural home buyers to reduce their income tax liability through a credit of 25 percent of the mortgage interest paid per year, or $2,000, whichever is less, the release stated.

Eligible borrowers include home buyers whose total gross annual household income does not exceed $44,300 for a one- to two-person household, or $50,945 for households with more than three people. The income levels are established using all sources of income for every person age 18 or older.

The only exception in this program, the release stated, is for those persons building houses in federally targeted areas. An applicant purchasing a home in a target area does not have to be a first-time home buyer and the income and sales price limits are higher: $53,160 for a one- or two-person household and $62,020 for a larger household.

Targeted areas include specific locations in the Missouri counties of Adair, Barry, Benton, Boone, Camden, Cape Girardeau, Dunklin, Hickory, Howell, Jasper, Laclede, Marion, Morgan, Oregon, Pemiscot, Pettis, Ripley, Scott, Texas, Wayne and Wright.

The Springfield metropolitan statistical area, including Greene, Christian and Webster counties, is not eligible for targeted area incentives.

Targeted areas are established where 70 percent of the families have an income that is 80 percent or less of the statewide median income.

The purchase price of a home financed through this program cannot exceed $121,340 for those within the targeted area, or $99,270 within other rural areas, the release stated.

Any type of loan financing is acceptable with the exception of a balloon loan. The mortgage loan must be for the purchase of a home and not for the refinancing of an existing mortgage, according to the commission.

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