Arkansas Mortgage Credit Certificate Program Guide

Guide to the Arkansas Mortgage Credit Certificate Program

The Arkansas Mortgage Credit Certificate (MCC) Program is designed to help eligible first-time homebuyers reduce their federal tax liability by offering a tax credit on the mortgage interest paid. This program makes homeownership more affordable by allowing homeowners to keep more of their income. Below is an updated guide for 2025, explaining the eligibility requirements, application process, and benefits of the program.

1. Program Overview:

• Purpose: The Arkansas MCC Program allows qualified homebuyers to claim a tax credit for a percentage of the mortgage interest paid each year, helping to lower their overall tax burden.
• Tax Credit Amount: The program offers a tax credit of up to 20% of the mortgage interest paid, which is applied against your federal tax liability. This reduces the total amount of tax owed.
• Eligibility Criteria: To qualify for the MCC Program, you must meet income and purchase price limits, as well as other requirements specific to the program.

2. Eligibility Requirements for 2025:

To qualify for the Arkansas Mortgage Credit Certificate Program, you must meet the following criteria:

• First-Time Homebuyer: This program is generally available to first-time homebuyers, defined as individuals who have not owned a home in the past three years. Exceptions may apply for buyers in certain areas or situations.
• Income Limits: Your household income must fall within the program’s limits, which are based on the area median income (AMI) for your county. These limits are adjusted annually to reflect changes in the local economy.
• Mortgage Loan Requirements: The loan must be for the purchase of a primary residence in Arkansas, and the mortgage must meet specific program criteria. Only certain types of loans, such as FHA, VA, or conventional loans, are eligible for the program.
• Property Requirements: The property you purchase must be located in Arkansas and must serve as your primary residence. The home must also meet the program’s price limits and quality standards.
• Homebuyer Education: Applicants must complete an approved homebuyer education course. This course helps ensure that you are well-prepared for homeownership and financially responsible in managing your mortgage.

3. How to Apply:

Applying for the Arkansas Mortgage Credit Certificate Program involves the following steps:

• Assigned Loan Officer: Once you begin the application, a dedicated loan officer will be assigned to assist you through the process. They will help ensure that you meet all the eligibility requirements and guide you in collecting the necessary documents.
• Required Documentation: You will need to provide documentation such as proof of income, tax returns, and a certificate of completion from the homebuyer education course. Your loan officer will inform you of any additional required documents.
• Submit Your Application: After gathering all necessary documents, submit your completed application to your loan officer, who will process the information and inform you of your eligibility for the program.

4. Benefits of the Program:

• Tax Credit: The primary benefit of the Arkansas MCC Program is the tax credit, which can be up to 20% of the mortgage interest paid each year. This reduces your federal tax liability and makes homeownership more affordable in the long run.
• Reduced Tax Burden: By claiming the MCC, you lower the amount of federal taxes you owe, freeing up more of your income for other financial goals or homeownership-related expenses.
• Long-Term Savings: The MCC Program helps to reduce the overall cost of your mortgage by offering ongoing tax savings each year, which can add up to significant savings over the life of the loan.

5. Finalizing the Loan:

• Approval Process: Once your application is approved, your loan officer will help you with the next steps in finalizing your mortgage. This includes signing loan documents and preparing for the closing process.
• Closing Costs: In addition to the down payment, you may be responsible for other closing costs that are not covered by the program. Your loan officer will provide a breakdown of these costs to ensure you understand your financial obligations.

Our experienced loan officers are here to guide you every step of the way. They will help you understand how to maximize the benefits of the Arkansas Mortgage Credit Certificate Program and ensure that the application process is smooth. With their support, you can confidently navigate the process of purchasing your new home while reducing your tax liability through the MCC Program.