MCC Frequently Asked Questions


  • What is a Mortgage Credit Certificate?

    A Mortgage Credit Certificate, also known as an MCC, is a federal tax credit that reduces the amount of federal income tax paid by the homeowner.  The tax credit is equal to 40% of the mortgage interest paid during the tax year, up to a maximum $2,000 per year.

    Homeowners are eligible for the tax credit every year, as long as they occupy the home as their primary residence. MCCs can save homeowners thousands of dollars over the life of their mortgage!

  • What are the eligibility requirements to receive a Mortgage Credit Certificate?

    To qualify, you must meet certain income requirements. Take the eligibility quiz to see if you meet the income requirements.

    MCCs are also restricted to first-time home buyers.  Please note that the definition of first-time home buyer is anyone who has not owned (or had ownership interested in) a primary residence in the past three years.  The first-time home buyer requirement is waived for home buyers purchasing a home in a targeted area and qualified veterans.

  • How do I apply for an MCC from TSAHC?

    To apply for an MCC, you must work with one of TSAHC’s approved lenders.  The lender will help you fill out the application and ensure that you meet all of the requirements.  Click here to find a participating lender in your area.

    Please note that you must apply for the MCC BEFORE you close on your home loan.  You cannot apply for the MCC after your loan has closed.

  • Can I combine an MCC with TSAHC’s down payment assistance?

    Absolutely!  As long as you meet all of the requirements of both programs, you can use TSAHC’s MCC and down payment assistance together. 

  • What type of loan can I get with an MCC?

    You must obtain a fixed-rate mortgage, but there are no restrictions on the type of loan, term or interest rate to apply for an MCC by itself.

    If combining your MCC with TSAHC’s down payment assistance, you must obtain an FHA, VA, USDA or conventional loan that meets TSAHC’s requirements.  TSAHC also sets the interest rates on the loan.  Click here to learn more about TSAHC’s down payment assistance programs. You can also use our down payment assistance calculator to explore the loan type, interest rate and grant amount options.

  • Are there any restrictions on the type of home I can purchase?

    To qualify for an MCC, you must occupy the home you are purchasing as your primary residence. If using the MCC program by itself, you can purchase the following property types:

    • New or existing homes
    • Unit in a condo, townhome, or PUD
    • An entire duplex, triplex, or fourplex (one unit must be owner-occupied)
    • Manufactured homes

    If combining your MCC with our down payment assistance, the eligible property types vary based on the loan type:

    FHA/USDA/VA Loans-

    • New or existing homes
    • Unit in a condo, townhome, or PUD
    • An entire duplex, triplex, or fourplex (one unit must be owner-occupied)


    HFA Preferred Conventional Loan-

    • New or existing homes
    • Unit in a condo, townhome or PUD
    • An entire duplex, triplex, or fourplex (must put down 5% or more and one unit must be owner-occupied)
  • Once I receive my MCC, how do I receive the tax credit dollars?

    It is your responsibility to claim your mortgage interest tax credit every year by filing a special IRS “8396” form. You have two options to take advantage of your credit.  You can either adjust your W-4 withholding to have less taxes deducted from your paycheck each month, or you can leave your withholding the same and receive your entire credit when you file your taxes each year.

    We encourage you to speak to a tax professional to determine which option is best for you.

  • What’s the difference between a tax credit and a tax deduction?

    A tax credit provides a dollar for dollar reduction of your income tax liability. For example, a $2,000 tax credit reduces your tax bill by $2,000. A tax deduction lowers your taxable income.  A $2,000 deduction might reduce your tax bill by $300 to $500, depending on what tax bracket you're in. 

  • If I get an MCC, can I still take the mortgage interest tax deduction on my tax return?

    You can take a tax deduction for any additional interest paid above the value of the tax credit.  For example, if you paid a total of $5,000 in mortgage interest in one year, you would be able to take the maximum MCC tax credit of $2,000 (which is equal to 40% of your interest paid).  You would also be able to take an itemized tax deduction for the remaining $3,000 in mortgage interest paid.

  • How will my income be calculated to determine my eligibility for an MCC?

    Your lender will consider income from all family members listed on the deed of trust to determine income eligibility.  This includes income from a non-purchasing spouse. However, it would not include income from those that will not end up on the deed of trust. For example, if an 18 year old is working at the grocery store or if grandma is living with you and receiving social security.

  • What if my income increases? Am I still eligible for the MCC tax credit?

    Yes.  We consider your income for eligibility purposes only when you first apply for the MCC.  

  • What fees are charged with an MCC?

    Your lender will collect the following fees when you apply for an MCC:

    • $500 MCC Issuance Fee
    • $200 Compliance Review Fee

    However, if your profession qualifies you for TSAHC’s Homes for Texas Heroes Program, you will receive your MCC for FREE if you combine your MCC with TSAHC’s down payment assistance.

    Lenders may collect other reasonable and customary fees and closing costs, provided all fees are fully disclosed in accordance with federal, state and local regulations.

  • What if I refinance my loan? Can I keep my tax credit?

    Yes, but you must apply for a reissued MCC from TSAHC.  The refinance loan must meet certain requirements to qualify for a reissued MCC.  Your lender will be able to provide you with additional information. You can also reach out to us at 877-508-4611 for more information.