Mortgage Credit Certificate (MCC) Program

Many states offer homeownership assistance programs designed to help eligible buyers afford a home, especially those with low to moderate incomes, veterans, active-duty service members, and surviving spouses. One of these programs is the Mortgage Credit Certificate (MCC), which can provide meaningful tax benefits to qualifying borrowers.

What Is the Mortgage Credit Certificate Program?

There are many different types of housing assistance options in most states; low-interest mortgages, down payment grants, and closing cost assistance.

A Mortgage Credit Certificate (MCC) program is essentially a dollar-for-dollar federal tax credit for a percentage of the borrower’s mortgage interest paid each year up to a capped amount (usually listed at $2,000, but limits may change). On top of this benefit, the borrower’s remaining mortgage interest not subject to the tax credit “may still be calculated as an itemized deduction,” according to NCSHA.

The MCC program exists thanks to the federal law known as the Deficit Reduction Act of 1984. It was further developed via the federal Tax Reform Act of 1986.

Who Is Eligible for a Mortgage Credit Certificate?

Rules may vary from state to state, but in general first‐time home buyers are favored. The definition of a first-time buyer will vary from state to state but in general you may find that if you have had no ownership interest in property for a specified length of time (three to seven years typically, depending on the state) you qualify as a first-time buyer even if you have owned a home in the past.

Some states forego the first-time buyer requirement if you are a qualifying veteran or if you are buying within certain targeted zones.

In general, purchase price restrictions, income limits, and the requirement that the home be a primary residence will apply. Income caps and price limits may be waived for purchases in certain zones or for certain applicants depending on the state.

How the Mortgage Credit Certificate Works

Borrowers who qualify for the MCC must apply for it via the state agency administering the program. Once approved, the homeowner qualifies for a tax credit equal to “the product of the mortgage amount, the mortgage interest rate, and the MCC percentage,” which is described as a rate the administering Housing Finance Agency (HFA) sets (typically between 10 and 50 percent according to NSCHA.)

The guidelines for such tax credits (and other IRS rules) are always subject to change, consult IRS.gov for the most current year’s guidance or consult a tax professional.

Where to Apply for a Mortgage Credit Certificate

You’ll need to explore the Housing Finance Agency official site in the state where you plan to purchase your home to see what MCC options you have (see the list below).

Things To Remember

• Federal tax code changes frequently. You can contact a local tax professional to determine what changes may apply to you in this context for state and federal taxation.
• State Housing Finance Agencies may require you to be a state resident for a minimum amount of time unless that state’s law includes provisions for military members and their families who have been assigned there from another state.
• Some state residency requirements do not feature exceptions. A good example of this is the requirements most agencies have that the home purchase be made within state lines.
• Some programs may have limited availability and some may run out of funding before the fiscal year ends. Whether this applies for your MCC needs or not will depend on the state agency.
• MCC may be administered alongside or in tandem with other homeowner assistance programs. Be sure to ask your agency what other options are open to you.

Housing Finance Agencies By State

Below, we have listed out the state housing finance agencies individually. You’ll find Mortgage Credit Certificate program options at most of the state-level HFA’s as well as other help for low to moderate-income borrowers.

• Alabama Housing Finance Authority
• Alaska Housing Finance Corporation
• Arizona Department of Housing
• Arkansas Development Finance Authority
• California Housing Finance Agency
• Colorado Housing and Finance Authority
• Connecticut Housing Finance Authority
• Delaware State Housing Authority
• District of Columbia Housing Finance Agency
• Florida Housing Finance Corporation
• Georgia Department of Community Affairs/Georgia Housing Finance Authority
• Guam Housing and Urban Renewal Authority – Associate Member
• Hawaii Housing Finance and Development Corporation
• Idaho Housing and Finance Association
• Illinois Housing Development Authority
• Indiana Housing and Community Development Authority
• Iowa Finance Authority
• Kansas Housing Resources Corporation
• Kentucky Housing Corporation
• Louisiana Housing Corporation
• MaineHousing
• Maryland Department of Housing and Community Development
• MassHousing
• Michigan State Housing Development Authority
• Minnesota Housing
• Mississippi Home Corporation
• Missouri Housing Development Commission
• Montana Housing
• Nebraska Investment Finance Authority
• Nevada Housing Division
• New Hampshire Housing Finance Authority
• New Jersey Housing and Mortgage Finance Agency
• New Mexico Mortgage Finance Authority
• New York State Homes and Community Renewal
• North Carolina Housing Finance Agency
• North Dakota Housing Finance Agency
• Northern Marianas Housing Corporation – Associate Member
• Ohio Housing Finance Agency
• Oklahoma Housing Finance Agency
• Oregon Housing and Community Services
• Pennsylvania Housing Finance Agency
• Puerto Rico Housing Finance Authority
• Rhode Island Housing
• South Carolina State Housing Finance and Development Authority
• South Dakota Housing Development Authority
• Tennessee Housing Development Agency
• Texas Department of Housing and Community Affairs
• Utah Housing Corporation
• Vermont Housing Finance Agency
• Virgin Islands Housing Finance Authority
• Virginia Housing
• Washington State Housing Finance Commission
• West Virginia Housing Development Fund
• Wisconsin Housing and Economic Development Authority
• Wyoming Community Development Authority

---