What You Need to Know About Mortgage Credit Certificates

A mortgage credit certificate, issued by state governments, allows homeowners to claim a tax credit for a portion of their mortgage interest paid that year.
Written by Andrew Biro
Reviewed by Melanie Reiff
A mortgage credit certificate (MCC) is a certificate issued by either a local or state government that allows tax-paying homeowners to claim a portion of their mortgage interest paid that year as a tax credit. This can make home purchases more accessible to first-time or low-income homeowners by reducing the amount they have to pay in taxes.
Administered by Housing Finance Agencies, the mortgage credit certificate program provides a dollar-for-dollar reduction in your tax bill by at most $2,000. Your actual tax credit amount depends on where you live and how much mortgage interest you paid in a year, with the MCC percentage figured at 10% to 50%.
As with anything tax-related, mortgage credit certificates can be confusing at times, and you may have questions regarding how they work, whether you’re eligible for one, and how to get one. Fortunately, licensed home and
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What is a mortgage credit certificate?

At their core, mortgage credit certificates—or MCCs—are documents which allow homeowning taxpayers to convert a portion of the mortgage interest paid during a year into a dollar-for-dollar, non-refundable tax credit of up to $2,000
MCCs are issued primarily through the originating mortgage lender but are also available through loan brokers.

How do they work?

MCCs operate by reducing the overall amount of tax liability a homebuyer has to pay, allowing you to pay less per year than you would otherwise have to. This can help low-to-moderate income homebuyers afford a home loan.

Advantages and disadvantages of mortgage credit certificates

As with any financial program, mortgage credit certificates have their pros and cons. Before you decide to request one, make sure you are familiar with all that they offer—including their potential drawbacks.


At first glance, mortgage credit certificates seem incredibly advantageous, and for many people they are. They:
  • Are compatible with multiple loan types: in most cases, MCCs can be used either with conventional loans or with government-backed loans.
  • Can make it easier to afford a house: for those with low-to-moderate incomes, MCCs can make homeownership more accessible by reducing the overall cost of mortgage interest.
  • Have the potential to offer high tax savings: as a tax credit, MCCs provide dollar-for-dollar tax liability deductions.


In reality, the benefits of mortgage credit certificates are often balanced out by their disadvantages, some of which include:
  • An upfront fee: the cost of a MCC depends on your state and lender, with some costing over $750.
  • Losing your credit if you refinance: if you decide to refinance your house, you may lose the credit provided by your MCC if it doesn’t meet certain conditions.
  • The possibility of having to pay back your tax savings: known as “recapturing,” you may have to repay some of your credit if you sell your home within nine years of the MCC.

How to get a mortgage credit certificate

Mortgage credit certificates are available upon request through your lender and must be approved and issued before closing on your home. It is recommended that you request one early on in the process so that the lender has time to get it approved, after which it will be valid for 90 days.
To qualify for a MCC, you need to meet these requirements:
  • Have first-time homebuyer status. Different states have different definitions of what constitutes first-time homebuyer status, and you may qualify even if you’ve owned a home before.
  • Do not exceed the purchase price limit. Purchase price limits are determined at the state and county level, so always check with your lender to find out what they are.
  • Do not exceed the household income limit. Similarly, household income limits vary by state and county, but are usually based around average income amounts.
Location also influences your eligibility for a MCC and may even allow you to obtain one without having first-time homebuyers status. 

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A mortgage credit certificate is issued by a mortgage lender operating under the guidance of a local or state Housing Finance Agency. It allows homeowners to claim a tax credit on a portion of the mortgage interest they paid that tax year, which may help low-income homeowners purchase a home for the first time.
To qualify for a mortgage credit certificate, you will have to meet the requirements set by your state and/or county. These requirements include: having first-time homebuyer status, not exceeding the purchase price limit, and not exceeding the household income limit. 
Physical location may also influence your eligibility and can even allow those who do not meet the first-time homebuyer requirement to qualify.
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