Mortgage Credit Certificate (MCC)

What is Mortgage Credit Certificate (MCC)?

Mortgage Credit Certificate (MCC) is a mortgage credit certificate for homebuyers in Alabama, administered by Alabama Housing Finance Authority (AHFA).

• The AHFA Mortgage Credit Certificate (MCC) gives Alabama homebuyers an ongoing federal income tax credit equal to a percentage of the annual mortgage interest paid, with the remaining interest still claimable as a deduction. The credit rate is tiered by loan amount (20%, 30%, or 50%), with a $2,000 annual cap on the 30% and 50% tiers. MCCs are issued first-come, first-served through participating lenders and may be paired with AHFA's Step Up down payment assistance or any 30-year fixed-rate mortgage.
• Annual federal tax credit up to $2,000 (or uncapped on the 20% tier).
• Frees up income to help qualify for a mortgage.
• Can be stacked with AHFA Step Up DPA.
• Works with conventional, FHA, VA, and USDA loans.
• Credit lasts for the life of the loan as long as the home remains the primary residence.
• Funding comes from Federal mortgage credit certificate authority (in lieu of mortgage revenue bonds).

How much assistance does it provide?

Mortgage Credit Certificate (MCC) offers up to $2,000 in assistance.

• Award tiers: Credit rate tiered by loan amount: 20% MCC for loans of $150,001 or greater (no annual cap); 30% MCC for loans of $100,001-$150,000 ($2,000/year cap); 50% MCC for loans of $100,000 or less ($2,000/year cap).
• The program can be combined with other assistance, subject to the rules of each.
• Amounts are the program's published maximums, not an offer — Alabama Housing Finance Authority (AHFA) determines any individual award.

Do you have to pay it back?

Mortgage Credit Certificate (MCC) is a tax credit rather than a loan, so there is nothing to repay.

• Forgiveness and repayment terms are set by the program and can change — confirm them on the official program page before applying.

Who qualifies?

Mortgage Credit Certificate (MCC) is open to first-time homebuyers and buyers who will live in the home as their primary residence.

What are the income limits?

Mortgage Credit Certificate (MCC) sets its income limit as follows: Federally established income limits vary by county and household size; per AHFA, qualifying households can earn up to approximately $161,700 annually (effective June 2, 2025) depending on location and family size. See ahfa.com MCC income limits page for the county-by-county table.

• The limit applies to total household income, not only the borrower’s.
• Area median income figures are published by HUD and updated annually, so check the current table for the county before relying on a number.

What kind of home can it be used for?

Mortgage Credit Certificate (MCC) caps the purchase price at $544,233.

• Eligible property types include Single Family.

Where does it apply?

Mortgage Credit Certificate (MCC) serves buyers purchasing anywhere in Alabama.

• The program targets specific areas: Federally designated target areas receive higher sales price limits ($665,173) and waive the first-time buyer requirement.

How do you apply?

Applications for Mortgage Credit Certificate (MCC) go through Alabama Housing Finance Authority (AHFA), which publishes the current terms and the application steps on its own site.

1. 1

   Contact Alabama Housing Finance Authority (AHFA) to reserve funds

   Funds are reserved through First-come, first-served through a statewide network of participating lenders., and are subject to availability.

2. 2

   Work with a lender who handles the program

   Hey Prescott is not a lender and does not accept applications; this page describes the program so a buyer can take it to a lender or housing counselor.