What is the Texas Mortgage Credit Certificate (MCC) Program?
The Texas Mortgage Credit Certificate (MCC) Program provides eligible homebuyers with a tax credit, reducing their federal tax liability and making homeownership more affordable.
How does the MCC Program work?
The MCC Program allows homebuyers to claim a portion of the annual mortgage interest they pay as a dollar-for-dollar tax credit on their federal income taxes, while still deducting the remaining interest.
Who is eligible for the MCC Program?
Eligibility is based on being a first-time homebuyer, a veteran, or purchasing in a targeted area. Applicants must also meet income limits and purchase price limits.
What defines a first-time homebuyer for the MCC Program?
A first-time homebuyer is someone who has not owned a primary residence in the past three years. Veterans and buyers in targeted areas may qualify regardless of previous homeownership.
How much of a tax credit can I receive?
The MCC Program allows homebuyers to claim up to 40% of their annual mortgage interest as a tax credit, with a maximum credit of $2,000 per year.
Are there income limits for the MCC Program?
Yes, income limits vary based on household size and the county where the property is located. These limits ensure the program targets low-to-moderate-income families.
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 meet program requirements and are permanently affixed to a foundation.
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Get Started NowWhat is the maximum purchase price allowed?
As of 2025, the maximum purchase price varies by county but typically ranges from $350,000 to $550,000, depending on program guidelines.
Do I need to combine the MCC Program with a specific type of mortgage loan?
The MCC can be used with most fixed-rate mortgage loans, including FHA, VA, USDA, and conventional loans, provided they meet the program’s requirements.
Can the MCC tax credit be combined with other homebuyer assistance programs?
Yes, the MCC Program can often be combined with down payment assistance programs and other state or local homebuyer benefits to maximize savings.
Does the MCC Program require repayment?
The MCC does not require repayment unless the buyer sells the home or no longer uses it as their primary residence within nine years, triggering a potential recapture tax.
What is the recapture tax, and how does it work?
The recapture tax applies if the home is sold within nine years and the buyer’s income exceeds certain thresholds. Most homeowners do not owe this tax, and program representatives can explain it in detail during the application process.
Is homebuyer education required for the MCC Program?
Yes, completing a homebuyer education course is mandatory to ensure buyers understand the financial aspects of homeownership and how to benefit from the MCC Program.
Are there location restrictions for properties under the MCC Program?
Yes, the property must be located in Texas and meet the program’s eligibility criteria for type and purchase price limits.
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Get Started NowCan veterans apply for the MCC Program without being first-time homebuyers?
Yes, eligible veterans can qualify for the MCC Program regardless of prior homeownership status, provided they meet other program requirements.
How long can I claim the MCC tax credit?
The MCC tax credit can be claimed annually for the life of the mortgage loan, as long as the buyer continues to live in the home as their primary residence.
What are the benefits of the MCC Program?
The program reduces federal tax liability, making monthly housing costs more affordable. It also complements other homebuyer assistance programs to provide long-term financial benefits.
Can the MCC Program be used with adjustable-rate mortgages?
No, the MCC Program is only available for fixed-rate mortgage loans to provide consistent and predictable benefits over the loan term.
What is the process for applying to the MCC Program?
Applicants work with an approved lender who will determine eligibility, guide them through the application process, and issue the MCC certificate upon loan closing.
Is there a fee for participating in the MCC Program?
Yes, a one-time issuance fee is required at closing. This fee is typically added to the buyer’s closing costs and varies depending on the lender and program guidelines.