If you are applying for a MSHDA loan and wanting to take advantage of the IRS tax credit, STOP! You can not do both! I just found this out myself today.
I was so bummed to hear this, however after calling MSHDA for an explanation I did find out why and understand.
MSHDA is already a tax free bond, so it would be like double dipping. With MSHDA you are getting the lower interest rate..........if not using MSHDA (and qualify for the tax credit) you can receive the tax credit.
So do the math...........planning on living in your home for a long time, lower interest rate may be in your best interest. Plan on living there shorter term, then stepping up...........tax credit to fix up the house may be better.
So figure out what is most important to you and go forth......................
It may be wise to contact a tax account to see what the best case scenario is for you.
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