Mortgage Tax Credit

Mortgage Tax Credit

The Ohio Housing Finance Agency's (OHFA) Mortgage Tax Credit provides homebuyers with a direct federal tax credit on a portion of the mortgage interest, lowering the tax liability by up to 40%. The tax credit cannot be larger than the owner's annual federal income tax liability, after deductions, exemptions and other credits.

Homebuyers must have a tax liability in order to use this non-refundable credit.

The size of the tax credit a homeowner receives is based on the location, property and type of mortgage:

  • If you use the tax credit with a loan through OHFA's First-Time Homebuyer program, you receive a tax credit of 40 percent of the home mortgage interest. The maximum annual tax credit is $2,000. The mortgage credit is in addition to the IRS home mortgage interest deduction.
  • If you use the tax credit with a different mortgage option from your lender, your credit percentage is 30 percent for the purchase of a bank owned property, 25 percent for a property located in a target area and 20 percent for all other properties.

Homebuyers coupling a mortgage tax credit with a loan through OHFA's First-Time Homebuyer program can also receive down payment assistance equal to 2.5% or 5% of the home's purchase price.

Am I Eligible?

You may qualify for an OHFA First-Time Homebuyer loan if the following applies:

  • You have not owned or had an ownership interest in your primary residence in the last three years.
  • You meet income and purchase price limits.
  • You meet the credit score requirements. Please note that credit score requirements may be higher for different loan types. Please check with your lender for specific requirements. The minimum credit score for borrowers using OHFA Homebuyer Programs are as follows:

    Loan Type:
    Conventional, USDA, VA = 640
    FHA = 660

    For advice on improving your credit score please contact a HUD-approved counseling agency in Ohio.

* Please view a complete list of eligibility criteria.

An OHFA First-Time Homebuyer loan may be combined with the Mortgage Tax Credit.

Homebuyer Education

Qualified buyers are required to complete free homebuyer education. OHFA's streamlined education program allows you to complete a course offered by any U.S. Department of Housing and Urban Development (HUD)-approved counseling agency in Ohio. Please note, OHFA homebuyer education is not completed until after homebuyer has submitted their loan application with their loan officer.

How Do I Apply?

OHFA works with lenders, credit unions and mortgage companies across the state. Find an OHFA-approved lender in your area, along with tips to help you with the application process, or call us toll-free at 888.362.6432.


The Ohio Housing Finance Agency | 57 East Main Street | Columbus, Ohio 43215
Toll Free 888.362.6432 | Phone 614.466.7970 | Fax 614.644.5393 | TDD 614.466.1940

John Kasich, Governor, State of OhioLegal Statement and Policies

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