Mortgage Certificate Credit Program
Mortgage Credit Certificate (MCC) Program
A MCC will reduce the amount of federal income tax homeowners pay, thus giving them more available income to qualify for a mortgage. With a MCC, the qualified homebuyer 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 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 multiplied by the annual interest paid.
Reduced Federal Income Taxes
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.
While all homeowners can claim an itemized tax deduction for mortgage interest, you can go a step further with a MCC. A MCC reduces your tax liability, dollar-for-dollar, by a percentage of the mortgage interest you pay.
Main Benefits to the Homebuyer
- Provides a tax credit up to $2,000 a year as long as the homebuyer occupies the home and has a mortgage
- It can help qualify the homebuyer for a loan by increasing their income by the tax credit amount
How a Homebuyer Qualifies
- Homebuyer must purchase a home within the City of McKinney
- Homebuyer could not have owned a home in the last three years as their primary residence unless they are a qualified veteran
Homebuyer’s Household Income Limits & Restrictions
- $70,400 for 1 - 2 occupants
- $80,960 for 3 or more occupants
- The purchase price cannot exceed $281,250
- Homebuyer must occupy the home as their principal residence
- Homebuyer must apply for the MCC through a participating lender
MCC Issuance Fee
- The fees can be paid by the buyer, seller, lender, or rolled into the loan
- They can be combined with the City of McKinney Down Payment and Closing Cost Assistance Program