GARDEN GROVE : Tax Plan Helps With 1st Home Purchase

A tax-credit program aimed at making it easier for first-time home buyers to qualify for a loan has been approved by the City Council.

Garden Grove joins the cities of Irvine, Santa Ana and Anaheim and the county of Orange in the $25-million project. About $6 million of that is available to Garden Grove.

Qualified applicants will receive mortgage credit certificates, which act as an Internal Revenue Service tax credit. Certificate holders can take an annual credit against their federal income taxes of up to 20% of the interest paid on the applicant’s mortgage.

To be eligible, applicants must buy a single-family home to use as a principal residence, be a first-time home buyer (no ownership interest in a home for the past three years) and have a household income of no more than $46,900 for one or two people, or $53,935 for three or more people.

Preference will be given to people who live or work in Garden Grove.

The council’s action commits $65,000 in redevelopment agency funds to the program, $50,000 of which is refundable to the city. While the bonds issued for the certificates are valued at $5 million, the way the IRS converts the bonds into certificates would allow the city to initiate $6.25 million in mortgages.