When buying a home in Washington, D.C. you should work with a lender familiar with Mortgage Credit Certificates (MCC’s) and who is participating in the MCC Program. A Mortgage Credit Certificate allows eligible borrowers to claim a Federal Tax Credit of 20% of the mortgage interest paid on the mortgage during each calendar year. The remaining 80 percent of the mortgage interest paid for that year may still be claimed as a tax deduction.
You can click here to get an overview of the program and to determine if you live in a targeted area. Some of the basics are listed below:
- Borrower must be a first-time homebuyer – 3-year rule applies, except for residences purchased in a Targeted Area or Veterans utilizing a one-time exception.
- You must include all of your household income in the below maximum MCC income limits:
- Non-targeted* Area Family of 2 or less $132,360
- Non-targeted Area Family of 3 or more $154,420
- Targeted Area Family of 2 or less $132,360
- Targeted Area Family of 3 or more $154,420
*A “targeted” area is identified as an area where 70 percent of the families who live there earn an income that is 80 percent or less than the statewide median income.
- Income limits and maximum sales price will vary based upon household size and location of property. The sales price limits (single-family home only) are below:
- Non-targeted Area $585,713
- Targeted Area $715, 872
- Property types allowed:
Single Family residences only (no 2-4 unit or co-ops). This includes detached homes, townhomes, and condominiums.
Lenders who have knowledge of this program and are an approved lender for the program are a big benefit to eligible homebuyers. You should also pick a lender that is well reviewed, responsive and is committed to providing you with lots of education and transparency.
I’m a great person to talk to about MCCs. Schedule a call and we can start the process to find out if you’re eligible.
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Brian Martucci is a loan officer for Capital Bank Home Loans, a division of Capital Bank, N.A. He has been in the mortgage industry since 1986 and has served in a number of roles, including loan processor, loan officer, mortgage broker, branch manager, and vice president. Brian Martucci – NMLS# 185421. His opinions do not necessarily reflect the opinions and beliefs of Capital Bank Home Loans or Capital Bank. Capital Bank, N.A.- NMLS# 401599. Click here for the Capital Bank, N.A. “Privacy Policy”.