Mortgage Credit Certificate Program
The federal government allows every homebuyer to claim an itemized federal income tax deduction for all of the interest paid each year on a mortgage loan. An MCC makes this benefit to the homebuyer even better: a certain percentage of the mortgage interest will be a credit - that is, a dollar-for-dollar reduction of the homebuyer’s tax liability. The remaining mortgage interest will continue to qualify as an itemized tax deduction. The specific amount of the MCC credit depends on how much interest you pay on a mortgage loan obtained from your lender through the program. However, the amount of the credit cannot be more than your annual federal income tax liability after all other credits and deductions have been taken into account. Unused MCC credit can be carried forward three years for tax purposes.
Montgomery County Housing Finance Corporation is offering this program for individuals who are purchasing a home within Montgomery County, Texas.
This program is designed to help qualified home buyers purchase a newly constructed or existing home by providing an annual tax credit up to $2,000, as long as you live in the home being purchased and have a mortgage.
Loans under this program will be made on a first-come first-serve basis to qualified buyers. We are helping to make your dream of owning a home come true with the Montgomery County Housing Finance Corporation’s Mortgage Credit Certificate Program.
It's simply a way for home-buyers to save money.
An MCC is a federal income tax credit designed to assist persons of low to moderate income to better afford individual ownership of housing. With an MCC, the qualified home buyer is eligible to write off a portion of the annual interest paid on the mortgage as a special tax credit, not to exceed $2,000, during each year that they occupy the home as their Principal Residence. The portion or amount of the tax credit is equal to the mortgage credit rate on the MCC (for example 35%) multiplied by the annual interest paid. This credit reduces the federal income taxes of the buyer, resulting in an increase in the buyer's net earnings. Increased buyer income results in increased buyer capacity to qualify for the mortgage loan. The MCC has the potential of saving the MCC holder thousands of dollars over the life of the loan.
If you borrow $120,000 at 5.5 percent interest, you will
pay approximately $6,600 in interest the first 12 months
of your mortgage. With a 35 percent MCC, you can
reduce your federal income tax liability by $2,000 for that
year, allowing you to reduce your monthly tax withholding
by $166.67. In addition, the MCC can also help you
qualify for more. Over the first 10 years of ownership, you
would save approximately $21,700 in federal taxes. And
if you purchase your home by December 1, 2009, the
$8,000 federal tax credit can be used in conjunction with
the MCC. Like all homeowners, you can also claim an
interest deduction on the remaining 65 percent of the
interest you pay.
Qualifying is easier than you think.
To be eligible for the MCC, you must be approved for a
mortgage and meet certain requirements, including:
* Purchase a home within the Eligible Loan Area.
* Be an Eligible Borrower. For a Local Housing Finance Corporation, there are no professions restrictions so just meet the requirements stated here. For the Texas State Affordable Housing Corporation borrower eligibility, click here to see Fact Sheet.
* Be a first-time home buyer or have not owned a home, as a principal residence, during the last three years. Even if you are not a first-time buyer, you may be able to use the MCC program if you are buying in an area designated as economically distressed or in the Go Zone/Disaster Areas.
* Annual household income does not exceed the maximum allowed income limits.
* For maximum income limits for Local Housing Finance Corporations, click here . For maximum income limits for the Texas State Affordable Housing Corporation, click here . The home’s sale price does not exceed the maximum allowed purchase price limits.
Download the MCC Requirement Form
Need Help Finding a MCC Eligible Lender?
Lenders who have signed up as a participant and who have completed training course on the MCC programs have earned the designation as an "Approved Lender". These individuals have exhibited a commitment to assisting potential MCC home buyers. To view a list of the MCC Approved Lenders, please select the list for the applicable MCC program
Want to Find Out IF Your Eligible?
To be eligible for the MCC, you must be approved for a mortgage and meet certain requirements, including: Purchase a home within Montgomery County, Texas *Cannot exceed the Maximum Income - $76,560 for 1-2 Occupants and $89,320 for 3 or More Occupants *Cannot exceed the Home Sales Price Limit of $316,177. Download the complete requirement PDF by clicking the following link.
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