Missouri Mortgage Credit Certificate (MCC) Program

What is the Missouri Mortgage Credit Certificate (MCC) Program?

The Missouri Mortgage Credit Certificate (MCC) Program provides eligible homebuyers with a federal tax credit that reduces their income tax liability, making homeownership more affordable.

Who qualifies for the MCC Program?

The program is available to first-time homebuyers and repeat buyers in targeted areas who meet income, credit, and property eligibility requirements.

How does the MCC Program work?

The MCC Program allows eligible borrowers to claim a tax credit of up to 25% of the annual mortgage interest they pay, directly reducing their tax liability.

How much is the tax credit under the MCC Program?

The tax credit is typically 25% of the annual mortgage interest paid, with a maximum credit of $2,000 per year.

Is the MCC a one-time benefit or ongoing?

The MCC provides an ongoing tax benefit for the life of the mortgage, as long as the homeowner continues to live in the home and pay mortgage interest.

Are there income limits for the MCC Program?

Yes, income limits apply and vary based on household size and the property's location. These limits are updated annually to reflect market conditions.

What types of properties are eligible for the MCC Program?

Eligible properties include single-family homes, townhouses, and condominiums. Manufactured homes may qualify if they are permanently affixed to a foundation and meet program requirements.

What is the maximum purchase price allowed under the MCC Program?

The maximum purchase price is typically $349,500, though this limit may vary in targeted areas.

Can the MCC Program be combined with other assistance programs?

Yes, the MCC Program can often be combined with other mortgage assistance programs, such as down payment assistance, to maximize financial benefits.

Is homebuyer education required for the MCC Program?

Yes, completing a homebuyer education course is required to ensure buyers understand the responsibilities of homeownership and how to maximize the program's benefits.

Can the MCC be transferred to a different property?

No, the MCC is tied to the original mortgage and property. If the homeowner refinances or moves, the certificate cannot be transferred.

What happens if I sell my home before paying off the mortgage?

If you sell the home within the first nine years of ownership, you may be subject to a recapture tax. The amount depends on factors such as income and the profit from the sale.

How do I claim the MCC tax credit?

Homeowners can claim the MCC tax credit by completing IRS Form 8396 and including it with their annual federal income tax return.

Does the MCC affect my ability to deduct mortgage interest?

No, homeowners can still deduct the remaining mortgage interest on their federal tax return, even after applying the MCC tax credit.

What is the cost to participate in the MCC Program?

There may be a one-time issuance fee or administrative cost for obtaining the MCC. Buyers should confirm these details with their lender.

Are there location restrictions for the MCC Program?

Yes, the property must be located in Missouri, and specific guidelines apply based on whether the property is in a targeted or non-targeted area.

Can the MCC Program be used for refinancing?

No, the MCC Program is specifically for first-time loans used to purchase a home and does not apply to refinancing.

What are the benefits of the MCC Program?

The MCC Program reduces the cost of homeownership by lowering annual tax liability, providing significant long-term savings for eligible buyers.

Does the MCC expire or end after a certain time?

The MCC remains valid for the life of the mortgage as long as the homeowner occupies the home and pays mortgage interest.

Can the MCC tax credit be carried forward if unused in a year?

Yes, any unused portion of the MCC tax credit can typically be carried forward for up to three years to offset future tax liabilities.