Texas Mortgage Credit Certificate (MCC) Program Guide

Guide to the Texas Mortgage Credit Certificate (MCC) Program

The Texas Mortgage Credit Certificate (MCC) Program is a valuable resource for eligible homebuyers, providing a federal tax credit that reduces the cost of homeownership by allowing buyers to claim a portion of their mortgage interest as a tax credit. This program is designed to make homeownership more affordable and sustainable for first-time buyers and others who qualify. Below is a detailed guide to the program’s features, eligibility requirements, and application process for 2025.

1. Program Overview:

• Purpose: The MCC Program offers eligible homebuyers a dollar-for-dollar reduction in their federal income tax liability, based on a percentage of their annual mortgage interest paid.
• Tax Benefits: Buyers can claim up to 40% of their annual mortgage interest (capped at $2,000 per year) as a tax credit, providing significant long-term savings.
• Compatibility: The MCC can be combined with other Texas Housing programs, such as My First Texas Home, for added affordability.

2. Eligibility Requirements for 2025:

To qualify for the Texas 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 are available 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.
• Credit Score: A minimum credit score of 620 is required. Additional lender-specific guidelines may apply.
• Property Requirements: The home must be located in Texas, used as the buyer’s primary residence, and meet program purchase price limits.
• Loan Requirements: The MCC can only be issued with a new mortgage loan. It is not available for refinancing existing loans.

3. How to Apply:

Follow these steps to apply for the Texas Mortgage Credit Certificate Program:

• Assigned Loan Officer: Once you begin the application process, a loan officer will be assigned to assist you. They will explain the program’s benefits, verify your eligibility, and guide you through the process.
• Prepare Documentation: Gather necessary documents, including proof of income, tax returns, credit history, and property details.
• Submit Your Application: Work with your assigned loan officer to complete and submit the application. Your loan officer will process your information and notify you of approval status.

4. Key Features of the MCC Program:

• Tax Credit Savings: The MCC provides a federal tax credit for up to 40% of the annual mortgage interest paid (capped at $2,000 per year), reducing your overall tax liability.
• Lifetime Benefits: The MCC remains in effect for the life of the mortgage, as long as the home is the buyer’s primary residence.
• Compatibility with Other Programs: Buyers can combine the MCC with other Texas Housing programs to maximize affordability and financial benefits.

5. Homebuyer Education Course:

• Mandatory Requirement: All applicants must complete a homebuyer education course to ensure they are fully prepared for the responsibilities of homeownership and understand how to utilize the MCC.
• Course Availability: The course is available online or in person. Upon completion, participants receive a certificate that must be included with their MCC application.

6. Finalizing the Process:

• Approval and Certification: Once approved, your assigned loan officer will guide you through the final steps, including issuing the Mortgage Credit Certificate and ensuring you understand how to apply it on your taxes.
• Filing Taxes: To claim the MCC, homeowners must include the credit information on their annual federal tax return. Your loan officer can provide guidance on how to utilize this benefit effectively.

The Texas Mortgage Credit Certificate Program is an excellent option for eligible homebuyers looking to reduce the long-term costs of homeownership through significant tax savings. By offering this benefit alongside affordable mortgage options, the program helps Texans achieve their homeownership goals. Begin your journey with the Texas MCC Program in 2025.