What is the Virginia Mortgage Credit Certificate (MCC) Program?
The Virginia Mortgage Credit Certificate (MCC) Program provides eligible homebuyers with a federal tax credit, reducing their tax liability and making homeownership more affordable.
How does the MCC Program work?
The MCC Program allows homebuyers to claim a percentage of their annual mortgage interest as a dollar-for-dollar tax credit, while still deducting the remaining interest on their taxes.
Who qualifies for the Virginia MCC Program?
Eligibility is based on being a first-time homebuyer, a veteran, or purchasing in a targeted area. Applicants must also meet income 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 prior homeownership.
How much of a tax credit can I receive with the MCC Program?
The program allows homebuyers to claim up to 20% of their annual mortgage interest as a tax credit, with a maximum 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 benefits low-to-moderate-income households.
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 guidelines and are permanently affixed to a foundation.
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Get Started NowWhat is the maximum purchase price allowed under the MCC Program?
As of 2025, the maximum purchase price varies by county but generally ranges from $300,000 to $500,000, depending on program criteria.
Can the MCC Program be combined with other homebuyer assistance programs?
Yes, the MCC Program can often be paired with down payment assistance programs and other financial benefits to maximize affordability.
Does the MCC tax credit need to be repaid?
The tax credit does not need to be repaid unless the home is sold or no longer used as the primary residence within nine years, which may trigger a 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. However, many buyers do not owe this tax, and details are provided 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 responsibilities of homeownership and how to use the tax credit.
Can the MCC Program be used with FHA, VA, or USDA loans?
Yes, the MCC Program can be combined with FHA, VA, USDA, and conventional loans, provided all program requirements are met.
How long can I claim the MCC tax credit?
The tax credit can be claimed annually for the life of the mortgage loan, as long as the buyer continues to use the home as their primary residence.
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Get Started NowAre there location restrictions for properties under the MCC Program?
Yes, the property must be located within Virginia and meet the program’s eligibility criteria for type and price limits.
Do veterans qualify for the MCC Program without being first-time homebuyers?
Yes, eligible veterans can qualify for the MCC Program regardless of prior homeownership, provided they meet other program criteria.
What are the benefits of the MCC Program?
The program provides a direct tax credit, reducing federal tax liability and increasing affordability for homebuyers.
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 tax benefits.
What is the application process for the MCC Program?
Applicants work with an approved lender who verifies eligibility, guides them through the application process, and issues the Mortgage Credit Certificate at closing.
Is there a fee to participate in the MCC Program?
Yes, a one-time issuance fee may apply, typically included in the closing costs. Specific details are provided by the lender during the application process.