Home At Last™ Mortgage Credit Certificate (MCC)

The Mortgage Credit Certificate helps eligible buyers qualify for a home by reducing debt ratios and increasing income. But how exactly does the MCC work? Who is eligible and how do you get one? 

As part of our Home At Last™ programs, the Nevada Rural Housing Authority’s Mortgage Credit Certificate (MCC) program ensures homeownership remains affordable by providing eligible first-time buyers and qualified Veterans* with an annual federal income tax credit equal to 20% of the mortgage interest paid – every year for the life of the loan. *Title 38 of the Code of Federal Regulations defines a veteran as “a person who served in the active military, naval, or air service and who was discharged or released under conditions other than dishonorable.”

Still confused about what the MCC is? Me too! Here is a real-life example of how the MCC can help first-time buyers and qualified Veterans get a home loan and how 20% of the mortgage interest paid finds its way back into a homebuyer’s bank account: 

Meet Hal! Hal is a first-time buyer, is eligible for the Mortgage Credit Certificate, and wants to buy in Washoe County. Hal recently met with a Home At Last™ approved Lender and was approved for a $430,000 home loan with an interest rate of 5.5%. In that first year of owning the home a homebuyer without an MCC will pay $23,505.43 in interest alone! Ouch! But not Hal because whatever Hal pays in mortgage interest, 20% of that will be credited to him that first year, second year… all the years for the life of the loan. HALlelujah!

During the first year Hal will get $391.75 a month credited back to him. It doesn’t fall from the sky and into Hal’s bank account – Hal receives the MCC benefit through a payroll tax deduction. Congrats, Hal, you just boosted your take home pay by $391.75 a month thanks to the MCC! The increased take-home pay was used by Hal’s Lender to help Hal qualify for a home. This was especially helpful for him because his monthly debt obligations (student loan payment, car payment, and credit card payment) were keeping him from qualifying for a home loan. The extra monthly income from the MCC was the income boost he needed to qualify for a home. MCC money can also be used toward buying a bigger, more expensive home, payments on a new car, upgrade your Hulu to Hulu Live, save for something fun like a shopping spree, or pocket the income for a rainy day.

Want to estimate your MCC benefits? Click here to use the MCC Calculator.

Contact a Home At Last™ Lender at FindANevadaLender.org and ask about the MCC. There are different requirements for the MCC such as purchase price and income limits depending on which county you are looking to buy a home in, and a Lender is best equipped to handle the next steps. Keep in mind the MCC can only be reserved BEFORE a home is purchased. Once the home is purchased the MCC is off the table and there is, at time of writing, no way to to get an MCC after you purchase your home.

Need Down Payment Assistance? Recipients of an MCC can pair their tax benefit with forgivable down payment and closing cost assistance. Click here to view today’s rates and assistance options.

Learn more about the Home At Last™ program with a free online homebuyer education course available 24/7.

A little shy and don’t want to talk with a Lender just yet? Schedule a one-on-one consultation with the Home At Last™ team member by emailing HAL@NVRural.org or by calling 800-GO-HAL-NV.

 

MCC Calculator – Estimate the Savings & Income Boost

MCC Income & Purchase Price Limits

View Home At Last™ Program Fees

What is Recapture Tax?

What Areas are “Rural”?

Refinancing?* Click Here to Learn What is Required to Re-issue the MCC

*A qualified veteran for the MCC program is defined by Title 38 of the Code of Federal Regulations as “a person who served in the active military, naval, or air service and who was discharged or released under conditions other than dishonorable.”

Refinancing?

To keep the federal tax credit benefit, the MCC must be re-issued after refinancing. Read the following tips and information regarding MCC reissuances.

  • There is no limit to the number of times a borrower may refinance.
  • The original borrower(s) are the only names that can be shown on a re-issued MCC, regardless of a change in marital status or removing a co-borrower from the mortgage.
  • The tax credit percentage must remain the same as the percentage shown on the original MCC.
  • Certified indebtedness on re-issued MCCs cannot exceed the original mortgage amount (the unpaid principal balance of the loan being paid off will be shown on the re-issued MCC unless the amount exceeds the amount shown on the original or previously re-issued MCC). Refer to IRS Form 8396 for full details when refinancing a mortgage with an MCC.
  • Income is not reviewed to determine eligibility when the MCC is re-issued after refinancing – this is only required when the original MCC is issued at the time of purchasing the home.

Click on the Refinancing? link above to be re-directed to the page with full instructions on how to get an MCC re-issued.