Guam § 4804 - Mortgage Credit Program; Established.

§ 4804. Mortgage Credit Program; Established.

(a) Establishment. There is hereby established within the

Guam Housing Corporation (“Corporation”) a Mortgage Credit

Certificate Program (“Credit Program”). The expectation of the

Credit Program is to provide assistance to qualified and eligible

first-time homeowners in obtaining an income tax credit. The

Credit Program reduces the amount of taxes the holder of the

certificate would pay. The objective of the Credit Program is to

assist a first time homebuyer qualify for a loan by allowing the

lender to reduce the housing expense ratio by the amount of tax

savings.

(b) Mortgage Credit Certificate. The Corporation shall

issue to first time homebuyers a Mortgage Credit Certificate

(“Credit Certificate”). The purpose of the Credit Certificate is to

provide housing assistance to eligible first time homebuyers

authorized by Congress in the 1984 Tax Reform Act.

(1) Credit Against Taxes. The Mortgage Credit

Certificate gives the homebuyer a Federal tax credit each

year the buyer keeps the same mortgage loan and lives in

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the same house. The qualified homebuyer who is awarded a

Mortgage Credit Certificate may take an annual credit

against their Federal income taxes. The credit is subtracted

dollar for dollar from Federal income taxes due.

(2) Median Income.

(A) For households that are eighty percent (80%)

of the area’s median income and below, the credit

equal to twenty percent (20%) of the annual interest

paid on the homebuyer’s mortgage.

(B) For households that are above eighty percent

(80%) of the area’s median income and not exceeding

the Mortgage Credit Certificate income limits, the

credit is equal to fifteen percent (15%) of the annual

interest paid on the homebuyer’s mortgage.

(C) The remainder of the mortgage interest is

taken as a deduction from gross income on the

homebuyer’s income tax return in the usual manner

which shall be paid directly to the financial institution

as part of the down payment and/or closing costs, for

the purpose of reducing the first-time homeowner’s

financial requirement to secure a mortgage loan.

(3) Relief. The relief shall be available to each family

or individual in addition to any other grants or loans that the

family or individual may receive from the Corporation or

other agencies, in accordance with the provisions set forth

in this Article.

2017 NOTE: Subitem designations in (b) were added to adhere to the

Compiler’s alpha-numeric scheme pursuant to the authority granted by 1

GCA § 1606.