HOUSING POLICY: DEMAND AND SUPPLY
The Homeownership Within Reach coalition advocates for tax credit policies developed to expand homeownership opportunity by increasing the supply of affordable for-sale homes. While we support broad affordable housing initiatives, our advocacy is focused on evidence-based policies that address affordable inventory shortages for low-income buyers whose income levels are 80 percent AMI and below. The primary intent of these policies is to regenerate wealth-building opportunity for low-income residents, with an accompanying benefit to communities through neighborhood stabilization.
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Down Payment Assistance
Down Payment Assistance programs are available through both public and private entities. Often offered as grants, Down Payment Assistance contributes to the initial expense of a home purchase, reducing the cost incurred by the buyer.
Mortgage Credit Certificate
Mortgage Credit Certificates offer a reduction in individual tax liability. Borrowers can receive a dollar-for-dollar tax credit for a portion of their annual mortgage interest, effectively reducing the cost of owning the home.
Mortgage Interest Deduction
The Mortgage Interest Deduction reduces federal income tax liability by allowing a filer to deduct mortgage interest from taxable income, allowing a homeowner to retain more income.
First-time Homebuyer Programs
Federal stimulus funding for first-time homebuyers was introduced during the Great Recession but has since expired. Incentive programs for first-time homebuyers continue to exist in some states and localities, offsetting individual tax liability. Several states also offer tax-exempt savings plans for first-time homebuyers.
Low Income Housing Tax Credit
The Low Income Housing Tax Credit(LIHTC) program offers tax credits to investors to support affordable rental housing development. While affordable rental housing is important for low-income residents, it does not convey the wealth-building opportunity and intergenerational wealth-building that homeownership provides.
New Markets Tax Credits
The New Markets Tax Credit (NMTC) program was established in 2000 to incent private investment in distressed communities. Through a unique model, nonprofit affordable housing developers have used these credits to expand affordable for-sale home development in qualified low-income communities, offering low-income residents the opportunity to accrue wealth through real asset appreciation.