First-time homebuyers who meet certain criteria can apply for the Texas State Affordable Housing Corporation’s (TSAHC) Mortgage Credit Certificate (MCC) and receive 15% of their mortgage interest as a federal income tax credit.
What is a Mortgage Credit Certificate?
A Mortgage Credit Certificate is an annual tax credit for first-time homebuyers. There is no maximum for the amount of the tax credit. First-time homebuyers are defined by TSAHC as people who have not lived in a home that they have owned in the last three years. An MCC may only be used in combination with TSAHC’s Down Payment Assistance Program.
How Does It Work?
TSAHC’s MCC calculator tool can help you and homebuyers view what successful applicants would save over their loan period. Simply enter the loan amount and interest rate to see a breakdown of the benefits of an MCC over a 30-year period. Homebuyers can still benefit from an MCC even if they refinance and receive a different interest rate, if they are still living in the home. The homebuyers must claim the mortgage interest credit annually on their federal income tax return to receive the benefit. An MCC is a non-refundable tax credit, meaning if a homebuyer has no federal income tax liability, the credit has no value that year.
Who Qualifies?
TSAHC offers an eligibility quiz to help potential homebuyers learn if they can benefit from an MCC. The MCC program has a $400 issuance fee which is deducted from loan proceeds at loan purchase. If your client is a teacher, first responder, corrections officer, or veteran, they fall under TSAHC’s Home for Texas Heroes and can access the MCC program for free.
More Resources
TSAHC has a recorded MCC Training webinar that explains the MCC program and exactly how homebuyers benefit from it. You can also learn more by taking TSAHC’s CE credit classes to become more knowledgeable on payment assistance options for your clients. Still have questions? Contact TSAHC directly to learn more about the MCC or any of their other assistance programs.
