Many Ohioans have faced obstacles to home ownership due to rising prices and high mortgage rates.
As such, the Ohio Homebuyer Plus Program is designed to assist Ohioans on their homebuying journey.
Ohio is the only state to have such a program, it creates specialized tax-advantaged savings accounts that will have access to above-market interest rates somewhere between 1 percent to 4 percent higher than usual rates. Contributions paid into the account may even qualify for certain tax deductions on your Ohio return.
How it Works
Prospective homebuyers work with a participating bank or credit union to apply for a savings account through Ohio Homebuyer Plus.
If all eligibility criteria are met, the application is approved.
The Ohio Treasurer’s office will make a deposit at a below-market rate with the bank or credit union.
The bank or credit union uses the interest generated by the Ohio Treasurer’s deposit to provide the accountholder with an enhanced interest rate on their savings account.
Eligibility
Compared to Federal initiatives, this state program has minimum requirements and no income level requirement.
To qualify an eligible account holder must:
- Be an Ohio resident at least 18 years of age.
- Have a primary resident in the State of Ohio.
- Only use the account proceeds toward the down payment or closing costs of a primary residence purchased in Ohio.
Requirements
The program has the following requirements:
- The account requires a minimum opening deposit of $100 and cannot exceed the maximum contributed balance of $100,000.
- The account is limited to a duration of 5 years.
- There is no minimum or maximum yearly contribution for the account.
- The account must be individually owned. Married couples cannot open a joint homebuyer account. However, two individuals who are legally married are both eligible to open individual accounts.
- Third-party contributions to the account are eligible, such as the saver’s parents, siblings, spouse, etc.
- The funds may be used to purchase a pre-existing home or a newly built home that is ready to be occupied. The funds cannot be used to purchase vacant land with the intention of building a new home or to make payments on a construction home.
Tax Deductions
Ohio taxpayers can deduct up to $5,000 of contributions per person and per account (or $10,000 for married couples), per year.
Third party contributors are eligible to deduct up to $5,000 of contributions made per account annually as well.
These deductions do not carry forward if you contribute more than the $5,000 deduction. However, there is a lifetime maximum deduction per contributor of $25,000 per account.
Visit https://tos.ohio.gov/homebuyerplus/fis to view a comprehensive list of participating financial institutions that can help you get your account set up.
This program has many special nuances to it. If you would like more details about the program, read the program outline. You can reach out to Zinner & Co. with any questions you may have.
