First-Time Home Buyer Mortgage Credit Certificates A Mortgage Credit Certificate is a 15-percent tax credit given to qualified first-time buyers. The income limit varies per county and funding for this program is not always available. If you secure a Mortgage Credit Certificate, you will receive a tax credit equal to 15 percent of the interest you pay on your mortgage. For example, if your interest rate is 7.5 percent on a $150,000 loan, you will pay about $11,250 in interest your first year. The government will give you a tax credit equal to 15 percent of this interest ($1,687.50). A borrower may file a revised W-4 form through their employer, which lowers the amount of federal income taxes withheld throughout the year, giving him or her extra money in every paycheck. This is a wonderful program when it is available. To find out if the Mortgage Credit Certificate program is available in your area, contact your loan counselor at (916) 635-6737. Down-Payment Assistance Down-payment assistance is available in many counties for first-time home buyers. This assistance usually comes in the form of grants or loans. County Grants Some counties offer grants to low-income families to help cover the down payment and closing costs. For example, in Sacramento County, a single person making $31,500 or less can receive a $2,500 grant from the county to buy his or her first home. The income limit varies by household size. County Loans Some counties offer down-payment assistance programs that provide loans for a first-time buyer’s down payment and closing costs. The loans are generally provided at a low interest rate and are forgivable after a certain number of years. For example, in Sacramento County, a borrower can receive down payment assistance that is forgivable after 10 years. If the borrower sells the home during that time, a portion of the funds provided by the county must be returned to the county.