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MCC FAQs
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What is a Mortgage Credit Certificate?
A Mortgage Credit Certificate (MCC) allows the homebuyer to claim a tax credit for 20 percent of the mortgage interest paid per year. It is a dollar-for-dollar reduction against their federal tax liability.
Who is eligible to receive an MCC?
The program is open to those individuals and families who: - meet income and home purchase price limits;
- meet the qualifying requirements of the mortgage loan;
- will use the home as their principal/primary residence; and
- have not owned a home as primary residence in the past three (3) years (first time homebuyers), are current homeowners looking to refinance certain qualified subprime mortgages, or are eligible veterans*
What qualified subprime mortgages are eligible for refinance under the MCC program?
A Qualified Refinance under the CHFA MCC Program is defined as the refinance of a “qualified subprime loan”, which is an adjustable rate single family residential mortgage loan made after December 31, 2001 and before January 1, 2008.
When does the MCC expire?
The MCC does not expire as long as the home remains your principal residence and you are paying mortgage interest. It will expire only when you sell or no longer use the house as your primary residence. If you do refinance, you may be able to get your MCC reissued. If you sell your home in the first nine years, you may be subject to the Federal Recapture Tax.
How much of a tax credit can be claimed under the MCC program?
The size of the annual tax credit will be 20 percent of the annual interest paid on the mortgage loan. The credit cannot be larger than the annual federal income tax liability, after all other credits and deductions have been taken into account. MCC credits in excess of the current year tax liability may, however, be carried forward for use in the subsequent three years.
* Eligible veteran: A person who served in the active military, naval, or air service of the United States, and who was discharged or released therefrom under conditions other than dishonorable, as defined in 38 USC Section 101.
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| Western Slope Office - 1.800.877.8450 |
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