(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
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.