Wednesday, July 23, 2014

City of Portland Mortgage Credit Certificate, DRAFT Example: $12,607 In Tax Savings in 5 Years.

In my recent post I indicated that the City of Portland could increase eligible incomes by 20% for their MCC program; in another post I reported that Oregon had only used 5% of their private activity bond capacity from 2011-2013, supporting the view that there was significant room to expand the use of MCC's.

Many, many years ago I had developed a tool that had been used by the Portland Housing Bureau to help determine what buyers might realize in tax savings by using the MCC.   The Bureau has an updated multipurpose Excel tool HERE that requires a lot of input to produce similar estimates. 

I found that tool a bit complex for my purposes so I created a draft simplified Excel tool that produces an estimate of ADDITIONAL tax savings over and above the mortgage interest deduction alone and also indicates whether the input income would qualify for a MCC. 

With the usual caveats that this is a DRAFT, and NOT tax advice but merely one person's estimate (mine) of possible tax savings, the PDF HERE and embedded below provides ONE example of a sales price affordable to a MCC income qualified household and the additional tax savings that a MCC might provide over a series of time periods. 

Originally created and posted on the Oregon Housing Blog

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