First Time Homebuyer Credit

You are considered to be a first time home buyer if you have not owned another principal residence at any time during the three years prior to the date you purchase your new home.

The rules for claiming the First-Time Homebuyer Credit changed on November 6, 2009.  Beginning on that date, the following changes took place:

• The income threshold for claiming the credit increased, and
• Dependents are eligible to claim the credit only if they purchased a new home before November 6, 2009.

Home Mortgage Interest Credit

The City of Portland offers a mortgage interest credit program to first-time homebuyers.  An MCC provides homebuyers with an annual tax credit, which reduces their federal income taxes owed as long as they keep the loan and continue to occupy the home as their principal residence.

The tax credit helps the homebuyer to more comfortably afford the monthly payment on their first home. The amount of the MCC tax credit will equal 20 percent of the annual mortgage interest paid by the homebuyer.

Information about Portland's MCC program.

Long Term Resident Credit

You may qualify for a refundable credit of up to $6,500 when you buy a replacement home to use as your principal residence. The requirements are:

• You must buy, or enter into a binding contract to buy, the replacement principal residence after Nov. 6, 2009, and on or before April 30, 2010
• You must close on the home before October 1, 2010.
• You (and your spouse if married) must have lived in the same principal residence for any five-consecutive-year period during the eight-year period that ended on the date the replacement home is purchased.
• You must occupy the new home as your principal residence for a minimum of 3 years.