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Attention HHF recipients: Information about tax form 1098-MA

If you received HHF assistance in 2016, you can use as special method to compute your deduction for mortgage interest and real estate taxes on your main home if you meet certain conditions.  For more information on how to compute your mortgage interest and real estate tax deductions, please see IRS 2016 Publication 530, contact your tax professional, or contact your local IRS Taxpayer Assistance Center.  IHCDA cannot give tax preparation advice.

Here’s what IRS Publication 530 says:

Hardest Hit Fund Programs

You can use a special method to compute your deduction for mortgage interest and real estate taxes on your main home if you meet the following two conditions.

  1. You received assistance under a State Housing Finance Agency (State HFA) Hardest Hit Fund program in which program payments could be used to pay mortgage interest.
  2. You meet the rules to deduct all of the mortgage interest on your loan and all of the real estate taxes on your main home.

If you meet these conditions, then you can deduct all of the payments you actually made during the year to your mortgage servicer, the State HFA, or HUD on the home mortgage (including the amount shown on box 3 of Form 1098-MA, Mortgage Assistance Payments), but not more than the sum of the amounts shown on Form 1098, Mortgage Interest Statement, in box 1 (mortgage interest received), box 5 (mortgage insurance premiums), and box 10 (real property taxes). However, you are not required to use this special method to compute your deduction for mortgage interest and real estate taxes on your main home.