A Mortgage Credit Certificate (MCC) is a federal tax credit program which accompanies your lender first mortgage product. The Mortgage Credit Certificate is a tax “Credit” and not a tax “Deduction” which results in a dollar for dollar tax benefit against the borrower liability.
The MCC is a federal tax credit that borrowers claim when filing their annual taxes with the IRS. It is important to note that borrowers must have sufficient tax liability to claim the federal credit. Borrowers who do not have a sufficient tax liability would not claim the MCC tax credit annually.
Borrowers will claim the MCC when filing their federal tax returns on an annual basis by completing the IRS Tax Form 8396 with the assistance of their tax professional.
Borrowers must meet 4 requirements in order to be eligible for the program. 1) Total Household Income must meet the program allowable limits. 2) Property purchase price must meet the program allowable limits. 3) Borrowers must be First Time Home buyers. ** 4) Borrowers must complete HUD approved homebuyer education **
The purchase price limit is the final acquisition amount and not the loan amount.
MCC Program – First Time Homebuyers Borrowers looking to receive the Florida Housing MCC Tax Credit must be First Time Homebuyers. The definition of a First Time Homebuyer is a person who has not owned and occupied their primary residence within three (3) years of the projected closing date. Borrowers who may own investment properties are eligible for the program. This requirement is for borrowers and spouses (if applicable). ** Exceptions to the First Time Homebuyer requirement are made for military veterans (with a valid DD-214) and those borrowers who may be looking to purchase a home located in a HUD designated targeted area.
Provide the most recent three (3) years tax documents to ensure the borrowers first time homebuyer eligibility. Borrowers must not have owned and occupied their primary residence within 3 years of the anticipated closing date. Borrowers are allowed to have rental property or vacation homes.
*Once it has been determined that your borrower is eligible for the program, you will reserve the MCC for the borrower in the Florida Housing MCC reservation system.