Find 'forgotten' tax break for first-timers

Mortgage Credit Certificate has a catch

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Most potential homebuyers are well aware of the federal tax credits available before June 30, 2010, but few first-time homebuyers are aware of another subsidy that has no deadline yet could prove to be a huge benefit for cash-strapped consumers.

The Mortgage Credit Certificate Program was authorized by Congress in the 1984 Tax Reform Act as a means of providing housing assistance to low- and moderate-income families. To qualify, buyers must not have owned a home in the previous three years, must meet income and purchase-price restrictions, and must intend to use the new home as a primary residence.

MCCs are now available in 26 states. The household-income and home-purchase-price limits vary by area. "Targeted" income areas have higher limits.