The Mortgage Credit Certificate (MCC) is an optional tax credit that income qualified first time home buyers may purchase as part of their home loan. What is it, who gets it and how do you save up to $2,000 per year over the life of the loan?
What is the MCC? The Mortgage Credit Certificate is provided by the Texas Department of Housing and Community Affairs to help make home ownership more affordable for low to moderate income groups. It targets certain housing areas, including within the City Austin.
Who can get an MCC? The scheme has the following requirements on home buyers:
- First time homebuyers (have not owned a home in the last three years)
- Low to moderate income. This is defined as earning a maximum of 115% or 130% of Austin Median Family Income. This qualification depends on household size, so the maximum allowable income for a family of four in Austin in 2008 is $79,465 per year.
- Buying a home for primary personal residence
- Must take a certified home-buyer education class before closing
How much can an MCC save? The scheme provides a tax credit of up to $2,000 per year as an offset to paid income tax. This is available for every year during the life of the loan if the home is still your primary residence. This tax credit is in addition to the regular tax deduction available to regular home owners.
How much does an MCC cost? The application fee is around $75, and the certificate costs 1% of the loan amount at closing.
Which lenders can I use to get an MCC? Only qualified lenders and loan officers can apply for the MCC on your behalf. This is a list of MCC approved lenders, or I could introduce you to some that I have worked with recently who provide excellent service.
The MCC is a great way for income qualified applicants to receive additional tax benefits for the life of their loan.
Contact an Austin Realtor if you have questions about the MCC and how it can save you money on your home purchase. 512 215 4785