A little-known state program that pays first-time homebuyers up to $2,000 a year has more than tripled its number of participants in a year.

Administrators expect an even higher surge of homebuyers applying this year as the real estate market strengthens.

The state-run Florida Housing Finance Corp. runs the program, which gives first-time homebuyers money back each year based on how much interest they pay on their mortgage.

Once approved, low- and moderate-income homeowners can claim up to half of mortgage interest they paid as a tax credit on their federal income tax return, said Cecka Rose Green, communications director of Florida Housing Finance. The credit is capped at $2,000 each year, she said.

“It’s a $2,000 reduction, dollar for dollar,” Green said. “It keeps money coming back to homeowners.”

The tax credit is good for 30 years or the life of the mortgage as part of the Florida Housing Mortgage Credit Certificate Program, Green said.

Any mortgage interest not counted to receive the credit can still be deducted on federal income tax return, according to Florida Housing Finance.

The program started in 2005, but it didn’t take off during the housing boom, when many Floridians couldn’t afford to buy, she said. Then the housing crash occurred and that scared off many potential homebuyers, she said. The program was restarted two years ago, and 157 homeowners got into it in the first year, she said.

Participation more than tripled in 2014, with 523 homeowners participating, including 51 in Broward and 24 in Palm Beach County, Green said.

It should be even more this year, she said. “Home price have stabilized – it’s now looking to be a great time to buy,” Green said.

Average 30-year fixed-rate mortgages averaged 3.66 percent this week, down from an average of 4.34 percent a year ago, according to the survey of Freddie Mac, the secondary lender.

But two years into the restarted program, many first-time buyers still don’t know about it, said Adam R. Cohn, branch manager of Standard Mortgage Co. of Boca Raton.

The program has another advantage beyond the yearly money back, Cohn said. “The beauty of the program is that homebuyers can use that income to qualify for a loan,” he said. “That helps buyers qualify for a higher mortgage.”

To qualify in Broward, income must be less than $82,800 a year for one to two people in a household or $96,377 for three or more. Homes must cost less than $337,500, or $412,500 in a targeted area.

In Palm Beach County, income must be less than $78,720 a year to qualify for one to two people in a household or $91,840 for three or more. Homes must cost less than $337,500, or $412,500 in a targeted area.

The Florida Housing Finance has a list of approved lenders who can take applications for the program at http://www.floridahousing.org. Click on MCC Mortgage Credit Certificate graphic, which is on the right side.

Source: The Sun Sentinel