Mortgage Credit Certificate (MCC)

The Mortgage Credit Certificate (MCC)

The MCC provides qualified homebuyers with an annual federal income tax credit equal to roughly 20% of the mortgage interest paid, every year for the life of the loan. Example: a loan amount of $345,000 with a 7.50% loan interest rate could produce tax savings the first year of $5,153*! Lenders can use the estimated tax savings as additional qualifying income and lower debt-to-income ratios.

Homebuyers: Find a lender and ask if you qualify for the MCC – it can only be issued at the time you’re buying your first home!

For qualified borrowers, the MCC can be added to the first mortgage loan whether or not an NRH assistance program is being used. The MCC is for first-time homebuyers, which means not having owned a home in the past three years. Qualified veterans* are exempt from the first-time homebuyer requirement. Income and purchase price limits apply, and borrowers must meet all loan underwriting requirements for the mortgage being obtained to purchase a primary residence. The 20% tax credit is not capped by the IRS – refer to the IRS website for full MCC tax credit details.

View more program details here, including Income Limits, Reissuance Application and Recapture Tax information.

* For the Veterans Exception, “veteran” is defined as “a person who served in the active military, naval, or air service, and who was discharged or released therefrom under conditions other than dishonorable.” The Veteran cannot have previously obtained a loan financed by single family mortgage revenue bonds utilizing the veteran exception to the first-time homebuyer requirement set forth in Section 416 of the Tax Relief and Health Care Act of 2006. Borrower must provide true and correct copies of discharge or release papers, which demonstrate that such discharge or release was other than dishonorable.