Rhode Island Mortgage Credit Certificate (MCC) Program Guide

Guide to the Rhode Island Mortgage Credit Certificate (MCC) Program

The Rhode Island Mortgage Credit Certificate (MCC) Program is a valuable tool for eligible homebuyers, offering a federal tax credit to reduce their annual tax liability. This program provides a way for buyers to save money on their mortgage interest over the life of their loan, making homeownership more affordable. Below is an updated guide to the program’s benefits, eligibility requirements, and application process for 2025.

1. Program Overview:

• Purpose: The MCC Program allows eligible homebuyers to claim a federal tax credit of up to 20% of their annual mortgage interest, reducing their overall tax burden.
• Tax Benefits: The tax credit is applied directly to the homeowner's federal income tax liability, providing significant savings over the life of the mortgage.
• Compatibility: The MCC can be combined with other Rhode Island Housing loan programs and down payment assistance options, increasing affordability.

2. Eligibility Requirements for 2025:

To qualify for the Rhode Island MCC Program, applicants must meet the following criteria:

• First-Time Homebuyer: The program is primarily for first-time buyers, defined as individuals who have not owned a home in the past three years. Exceptions may apply for buyers in targeted areas or veterans.
• Income Limits: Household income must fall within program limits, which vary based on location and household size. These limits are updated annually.
• Property Requirements: The property must be located in Rhode Island and used as the buyer’s primary residence. It must also meet the program’s purchase price limits and eligibility criteria.
• Loan Requirements: The mortgage must be a new loan, and the program is not applicable for refinancing existing mortgages.

3. How to Apply:

To apply for the Rhode Island MCC Program, follow these steps:

• Assigned Loan Officer: Once you initiate the process, a loan officer will be assigned to assist you. They will verify your eligibility, explain the program’s benefits, and guide you through the application process.
• Gather Required Documentation: Be prepared to provide proof of income, tax returns, credit history, and details about the property you wish to purchase.
• Submit Your Application: Work with your assigned loan officer to complete the application and provide all necessary documentation. They will handle the processing and notify you of your eligibility and approval status.

4. Key Features of the MCC Program:

• Tax Credit Savings: The MCC provides a dollar-for-dollar reduction in federal income taxes, up to 20% of the mortgage interest paid annually.
• Lifetime Benefits: The tax credit remains in place for the life of the mortgage, as long as the home remains the buyer’s primary residence.
• Combining Benefits: The MCC can be used alongside other Rhode Island Housing loan programs and down payment assistance options for even greater savings.

5. Finalizing the Process:

• Approval and Certification: After approval, your assigned loan officer will guide you through the final steps, including issuing your Mortgage Credit Certificate.
• Filing Taxes: To claim the tax credit, homeowners must include the MCC information on their annual federal tax return. Your loan officer will provide guidance on this process if needed.

The Rhode Island Mortgage Credit Certificate (MCC) Program offers a significant financial advantage for eligible homebuyers, reducing their tax liability and making homeownership more affordable. With ongoing savings and compatibility with other assistance programs, the MCC is a powerful tool for achieving your homeownership goals. Begin your journey to affordable homeownership with the Rhode Island MCC Program in 2025.