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Mortgage Credit Certificate Program

There is currently no funding available for new Mortgage Credit Certificates, please see re-issuance instructions for existing borrowers with a Mortgage Credit Certificate.

Summary

The Mortgage Credit Certificate (MCC) program allows buyers to save up to $2,000 on their federal taxes, every year for the life of their mortgage. 

Tax Credits

The program awards a tax credit valued at 50% of the annual mortgage interest paid and is available annually as long as the home remains the home buyer’s primary residence. Homeowners are encouraged to consult a tax professional to calculate their credit through the Mortgage Credit Certificate.

Example: A home buyer qualifies for a mortgage loan of $100,000 at a fixed interest rate of 4.0%. Interest paid in year 1 = $3,968, x50%, year 1 credit
= $1,984.

Homeowners are encouraged to consult a tax professional to calculate their credit through the Mortgage Credit Certificate.

Reissuable Upon Refinance

The MCC may be reissued upon refinance and may be transferable upon sale under certain conditions if reissued by IFA in accordance with program requirement.

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Recapture Tax and Fine Print

Details

Borrowers who buy their homes using the FirstHome, FirstHome Plus or FirstHome 2nd Loan Homebuyer Programs may be subject to recapture tax.

Borrowers repay the government a portion of their gain on the sale of their home, depending on (1) whether there is a gain on the sale, (2) the household income at the time of sale, and (3) if the sale occurs within nine years of buying the home. Recapture Tax is paid directly to the IRS when filing taxes for the year in which the home is sold.

Nothing in the Recapture Tax provisions should prevent borrowers from using IFA's FirstHome, FirstHome Plus or FirstHome 2nd Loan Homebuyer Programs.

For IFA FirstHome, FirstHome Plus or FirstHome 2nd Loan program Loans closed on or after November 14, 2011, if you are required to pay a Recapture Tax to the Internal Revenue Service (IRS), IFA will reimburse you for the actual amount of the Recapture Tax paid to the IRS. Please consult the IRS or a tax professional with any Federal Recapture Tax questions.

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Must be a first-time home buyer (Defined as not owning your primary residence in the last three years). OR Be a military veteran with discharge of other than dishonorable and not previously used a mortgage revenue bond program such as FirstHome previously to finance a home purchase. OR Purchase a home in a Targeted Area (please use the eligibility quick check tool to determine if you're purchasing in a Targeted Area).

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For cases where borrower has no credit score, non-traditional credit documentation allowed in accordance with agency guidelines for the loan type.

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These are minimum requirements; a higher credit score, a lower debt to income ratio, or a down payment greater than 3% may be required in some circumstances. Follow agency guidelines for loan type.