Mortgage Credit Certificate

A Mortgage credit certificate (MCC) provides eligible first-time homebuyers the advantage of a special annual federal income tax credit. The MCC Program was sanctioned in the 1984 Tax Reform Act by the congress. It was supposed to serve as a means of reaching out housing assistance to low and moderate income group families. However, only a limited number of cities have sanctioned the MCC Program.

1. The MCCs are issued via participating lenders throughout the state.



2. The MCC remains effective till the life of the mortgage loan provided the home concerned remains the primary residence of the homebuyer.

Requirements to qualify for a MCC:

• Both the income and the price of purchase of the home must fall within the established guidelines of the concerned city.



• The home purchased must be used as the principal residence by the homebuyer. If it ceases to be the principal residence then the MCC will be revoked and the mortgage credit cannot be claimed.



• The homebuyer should not have had an ownership in a principal residence over the past three years.



• The mortgage loan concerned has to be a new loan i.e. non-existing till date.



• The primary mortgage loan has to be a fixed rate mortgage.

Benefits of MCC:

• A MCC reduces the amount of federal income tax. Thus, one intending to buy a home easily qualifies for a mortgage loan and for making monthly payments as more income becomes available (due to reduction of income tax).



• The homebuyer may decide to refinance and may still retain the tax credit. The MCC Administrator can especially throw light on this.

Related Forum Discussion

• MCC to be used in Mortgage Revenue Bond loan