What is the Idaho Mortgage Credit Certificate (MCC) Program?
The Idaho Mortgage Credit Certificate (MCC) Program provides eligible homebuyers with a federal tax credit of up to 35% of their annual mortgage interest, capped at $2,000 per year. This program helps reduce the overall cost of homeownership by lowering the buyer's federal tax liability.
Who qualifies for the MCC Program?
To qualify, applicants must be first-time homebuyers who have not owned a primary residence in the past three years. They must also meet specific income and purchase price limits, which vary based on the county and household size.
How does the MCC tax credit work?
The MCC allows you to claim a percentage of your annual mortgage interest as a dollar-for-dollar tax credit, reducing your federal tax liability. For example, if you pay $7,000 in mortgage interest and your MCC rate is 35%, you can claim a $2,000 tax credit (the program maximum).
What are the income limits for the MCC Program?
Income limits depend on the county and household size. These limits ensure the program benefits low- to moderate-income families and are subject to annual updates.
Are there purchase price limits for the MCC Program?
Yes, purchase price limits apply and vary by county to ensure homes remain affordable. Prospective buyers should consult their lender for current limits specific to their area.
Is there a fee to apply for the MCC Program?
Yes, there is a one-time MCC issuance fee of $300, which is usually paid at the time of loan closing.
Can the MCC be used with different loan types?
Yes, the MCC can be combined with various loan types, including conventional, FHA, VA, and USDA loans. Your lender will confirm whether the MCC applies to your specific loan product.
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Get Started NowCan the MCC be used with down payment assistance programs?
Yes, the MCC can be combined with down payment assistance programs offered by Idaho Housing, subject to meeting all respective eligibility requirements.
Is homebuyer education required for the MCC Program?
While not mandatory, completing a homebuyer education course, such as Finally Home!®, is highly recommended to prepare buyers for the responsibilities of homeownership.
What happens if I refinance my mortgage?
If you refinance, you may be eligible to reissue your MCC, allowing you to continue receiving the tax credit. It's important to consult with Idaho Housing or your lender about reissuance requirements.
How long can I claim the MCC tax credit?
The MCC tax credit can be claimed for as long as you occupy the home as your primary residence and continue to pay mortgage interest. The credit is capped at $2,000 per year.
What happens if my tax liability is less than the MCC credit?
If your tax liability is less than the MCC credit, the unused portion can be carried forward to future tax years for up to three years.
What are the occupancy requirements for the MCC Program?
The property must be occupied as your primary residence for the duration of the mortgage. Using the home as a rental or secondary property disqualifies you from claiming the MCC credit.
Is the MCC Program available statewide?
Yes, the program is available throughout Idaho, but income and purchase price limits vary by location.
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Get Started NowCan I transfer my MCC to another property?
No, the MCC is tied to the original property and cannot be transferred. If you sell your home, the certificate becomes void.
Are there any recapture taxes if I sell my home?
A federal recapture tax may apply if you sell the home within nine years, depending on factors such as the sale price, your income at the time of sale, and the MCC's original issuance.
Do I need to reapply for the MCC each year?
No, the MCC is issued once at the time of loan closing and remains valid for the life of the mortgage, as long as eligibility requirements are met.
What documentation is required to apply for the MCC?
Applicants must provide proof of income, household size, and other eligibility details as requested by their lender during the application process.
What if I previously owned a home but sold it over three years ago?
If you have not owned a home in the past three years, you qualify as a first-time homebuyer under the MCC Program and may be eligible to apply.
How do I apply for the MCC Program?
To apply, work with a participating lender who will guide you through the eligibility verification and application process, ensuring all requirements are met.