Mortgage Credit Certificate (MCC) Program

What is the mortgage credit certificate?

The Mortgage Credit Certificate (MCC) program allows first time home buyers to claim up to 20% of the mortgage interest paid each year as a federal income tax credit. This program also helps homeowners with existing Adjustable rate mortgages who need to refinance. MCC's are available in ALL counties in Colorado.  This is separate and on top of the $8,000 first time buyer tax credit!

How does the program work?

• For the life of the loan, MCC holders can claim a dollar-for-dollar reduction of income tax liability equal to 20 percent of the annual mortgage interest on the first mortgage.  This reduces the amount of federal taxes owed, but cannot be issued a refund.  Thus increasing your take home pay which can be used to help you qualify for a loan, and to assist in making the monthly mortgage payment.

-For example, a borrower with a 5.5% fixed rate 30-year mortgage of $150,000 would make approximately $8,200 in interest payments during the first year of the mortgage.  With a MCC of $1,640 (20% of $8,200) of the interest payments would be allowed to be taken as a tax credit toward the your federal income tax liability.  This would effectively add into your monthly income $136.67 ($1640 / 12 months = $136.67) 

** Mortgage Credit Certificate = ($1640 / 12 months) = $136.67 MORE in your paycheck each month. This can help in household bills, towards the mortgage, savings..... Remember the monthly benefit varies by your loan amount and interest rate!!

When using the MCC tax credit rate, you are still eligible to deduct the remaining 80% of annual mortgage interest from your taxes (because remember the MCC is the first 20%)

-For example, assume you pay $8,200 for the first year in mortgage interest.  With a 20% MCC, the homebuyer could take a credit of $1,640 upfront in your paycheck(20% of $8,200), and an additional mortgage interest deduction of $6,560 (80% of $8,200) when you file your taxes.

Who is eligible for the MCC program?

• First time home buyers who meet the income and purchase price requirements (see www.milehigh.com/housing or www.chfainfo.com) for detailed information and eligibility guidelines.

Who do I work with to obtain an MCC?

• Buyers must work with a qualified lender approved by the city and county of Denver or CHFA. 
• We are approved with both!!! To qualify with us please email Ray at rwilliams@summit-mortgage.com