Mortgage Credit Certificate Makes First Home More Affordable

For many first-time homebuyers, a Mortgage Credit Certificate (MCC) could be the difference that makes buying and owning a home affordable.

Administered in Virginia by the Virginia Housing Development Authority (VHDA), an MCC is a federal income tax credit, equal to 20 percent of the annual mortgage interest paid. The remaining 80 percent can still be taken as an income tax deduction. The MCC is effective for the life of the mortgage, as long as the borrower lives in the home.

There are some eligibility requirements. Borrowers must be first-time homebuyers, or not have owned a home in the previous three years. There are also income limits and sales price limits on the home being purchased. Borrowers should consult with their tax preparers to determine if an MCC will benefit them.

Interested homebuyers should ask their lender for an MCC when they first apply for their mortgage, because VHDA will need to approve the MCC application and issue an MCC commitment — before the buyer closes on their home.

To learn more about how VHDA’s MCC program could save money for your first-time homebuyer clients, visit http://vhda.com/MCClenderinfo.