The Mortgage Credit Certificate (M.C.C) program allows eligible first time home buyers to claim up to 20-25% (depending on where you buy) of the mortgage interest paid each year as a federal income tax credit. This still allows the remaining mortgage interest, property taxes, and mortgage insurance to be tax deductible. M.C.C's are available in ALL counties in Colorado.

How does the program work?

• For the life of the loan, M.C.C holders can claim a dollar-for-dollar credit of income tax liability equal to 20-25% of the annual mortgage interest on the first mortgage. This reduces the amount of federal taxes owed, but cannot be issued a refund. So by changing your payroll withholdings, increasing your take home pay, buying a home can be much more affordable. 

-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 M.C.C 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) when you change your withholdings through work.

** 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 M.C.C tax credit rate, you are still eligible to deduct the remaining 75-80% of annual mortgage interest from your taxes (because remember the M.C.C is the first 20-25%)

-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.