Lisa Schade

Broker, BS, CDPE, SFR

Q: What Are Mortgage Credit Certificates?

 

 

A: A mortgage credit certificate, or MCC, makes it easier for eligible buyers to qualify for a mortgage loan.  Offered by many city and county governments, they allow first-time buyers to take advantage of a special federal income tax write-off.  

Under MCC programs, the lender can reduce the housing expense ratio – the percentage of gross monthly income applied toward housing expenses – by the amount of the tax savings. Normally, lenders reject loans if the housing expense ratio is too high.

Program requirements for MCCs vary, although most adhere to the following guidelines:

  • The buyer must live in the home being purchased with an MCC-assisted mortgage.
  • Total household income cannot exceed certain limits.
  • The buyer cannot have owned a principal residence within the past three years. This restriction may be waived if a property is purchased within a certain targeted area.
  • The purchase price must fall within an established limit.

More information is available by calling your local housing or redevelopment agency, or contacting your real estate agent.

 

Reprinted with permission from RISMedia. ©2015. All rights reserved.

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