Massachusetts Home Buyer Guide

New Hampshire first-time home buyers looking for an extra tax break will want to investigate the New Hampshire Housing Finance Authority home buyer tax credit program.

Launched in March 2013, NH Housing designed the program to save first-time home buyers in the Granite State up to $2,000 a year on their federal income taxes, making homeownership more affordable for low- to moderate-income home buyers that qualify.

The "Home Start Homebuyer Tax Credit Program" allows eligible NH first-time home buyers throughout the state, and existing owners purchasing homes in certain areas, to turn a percentage of the mortgage interest they pay into a dollar-for-dollar tax credit against their federal income tax liability for the life of the mortgage loan. Participants also may be eligible to take a federal deduction on the remainder of their mortgage interest paid in addition to the maximum $2,000 home buyer tax credit.

Unlike the federal government’s first-time home buyer tax credits, which were created as part of the economic stimulus package passed by the U.S. Congress several years ago to provide first-time home buyers (and later all home buyers) with a one-time boost of $7,500-8,000, the Home Start Homebuyer Tax Credit Program allows participants to save more by giving them the opportunity to claim a tax credit for as much as $2,000 each year (1) for as long as they have their original mortgage, (2) are still paying mortgage interest, and (3) use the home as their primary residence.

According to NH Housing, program participants don’t have to wait for a federal tax refund check to realize their tax credit benefit. Instead, they can adjust their tax withholdings so they receive more take-home pay each month. They may then choose to use that extra money each month to help make their mortgage payments.

The Homebuyer Tax Credit can be combined with New Hampshire Housing’s mortgage programs, which offer additional benefits, such as cash assistance for down payment and closing costs, and free home buyer education.

The program has eligibility requirements, including income and purchase price limits and specifications about allowable property types. For additional information about the tax credit, including a brochure, fact sheet, list of lenders and income limit guidelines, NH Housing has a Web page about the tax credit to assist home buyers. New Hampshire Housing also has free online education about the Home Start Homebuyer Tax Credit Program. 

According to data published in August 2012, income limits vary by county and even by city or town. For example, a household of three or more people in Portsmouth, NH (Rockingham County) is subject to an income limit of $112,700 (1-2 person households $96,600). For most cities and towns in New Hampshire, the income limit for three-or-more-person households is $92,500. It's $80,500 for one-to-two-person households.

The Home Start Homebuyer Tax Credit Program is a Mortgage Credit Certificate (MCC) Program. The MCC Program is a federal program. A MCC works by reducing the federal income taxes that an eligible home buyer must pay. 

NHHFA is a self-supporting public benefit corporation. The Authority operates a number of rental and homeownership programs designed to assist low- and moderate-income home buyers with obtaining affordable housing. Since its inception, New Hampshire Housing has helped almost 40,000 families purchase their own homes and has been instrumental in financing the creation of more than 14,500 multi-family housing units.