Indiana Mortgage Credit Certificate (MCC) Program Guide

Guide to the Indiana Mortgage Credit Certificate (MCC) Program

The Indiana Mortgage Credit Certificate (MCC) Program provides a valuable tax benefit to help first-time homebuyers afford their homes by offering a direct federal tax credit. This program helps to reduce the financial burden of homeownership by providing a percentage of your mortgage interest as a credit against your federal income tax liability. For 2025, the MCC program continues to assist eligible homebuyers by offering this benefit, making homeownership more affordable. Below is an overview of the MCC program, including eligibility requirements, benefits, and the application process.

1. Program Overview:

• Purpose: The MCC program helps first-time homebuyers by offering a federal tax credit that reduces the amount of income tax they owe. This can help lower monthly mortgage payments, making homeownership more accessible.
• Tax Credit Amount: The MCC program offers a tax credit equal to 20% of the mortgage interest paid per year, up to a maximum of $2,000 annually. This can significantly reduce your tax burden and improve your financial situation.
• Loan Eligibility: The tax credit is available on new or existing homes that meet specific criteria, including property location and price limits.

2. Eligibility Requirements for 2025:

To qualify for the Indiana MCC program, applicants must meet the following criteria:

• First-Time Homebuyer: The program is generally intended for first-time homebuyers. A first-time homebuyer is defined as someone who has not owned a home in the last three years. Some exceptions may apply, such as for veterans or those purchasing in designated target areas.
• Income Limits: The applicant’s household income must be below the set limits, which vary based on the county and household size. These limits are updated annually to reflect local economic conditions.
• Credit Score: A minimum credit score of 640 is required to apply for the MCC program. Lenders may have their own specific credit requirements, so it is important to check with an approved lender.
• Property Requirements: The property must be located in Indiana and must serve as the applicant’s primary residence. The home must also meet the program’s price limits to ensure it remains affordable for eligible buyers.
• Homebuyer Education: All applicants must complete an approved homebuyer education course. This course prepares buyers for the responsibilities of homeownership, including budgeting and managing mortgage payments.

3. How to Apply:

To apply for the Indiana MCC Program, follow these steps:

• Assigned Loan Officer: Once you express interest in the program, a dedicated loan officer will guide you through the application process. The loan officer will verify your eligibility and help you gather all the necessary documentation.
• Required Documentation: Be prepared to provide documentation such as proof of income, tax returns, credit reports, and the certificate of completion for the homebuyer education course.
• Submit Your Application: After gathering all required documents, submit your completed application to your loan officer. The loan officer will review your application, confirm your eligibility, and proceed with the next steps of the process.

4. Homebuyer Education Course:

• Mandatory Requirement: A homebuyer education course is required for all applicants. This course covers essential topics such as mortgage management, budgeting, and understanding the responsibilities of owning a home.
• Course Availability: The course is available online and in-person, allowing flexibility for applicants. Upon completion, you will receive a certificate that must be submitted as part of your application.

5. Tax Credit Details:

• Tax Credit Amount: The MCC program offers a tax credit of 20% of the mortgage interest you pay each year, with a maximum credit of $2,000 annually. This amount can help reduce your tax burden, providing savings on your federal income tax.
• Tax Benefits: The credit is a direct reduction in your federal income tax liability, which can be applied to reduce your overall tax bill, making it easier to afford homeownership.
• Loan Requirements: The tax credit is applicable only to the mortgage interest paid on the primary residence. The credit can be claimed each year for as long as the homeowner remains in the property.

6. Finalizing the Loan:

• Approval Process: Once your application is reviewed and approved, your loan officer will help you understand the terms of your mortgage and tax credit. You will then move forward with signing the necessary loan documents.
• Closing Costs: While the MCC program assists with tax credits, you may still be responsible for some closing costs associated with the mortgage. Your loan officer will explain the full cost structure and help you understand which costs are covered by the program and which are not.

Our dedicated loan officers are here to ensure you fully understand the Indiana Mortgage Credit Certificate Program. They will guide you through the application process, help you access the tax credits, and ensure you benefit from this valuable program. With their support, you can confidently take advantage of the MCC program and make homeownership more affordable.