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Program type · 3 of 5

Mortgage Credit Certificates
an annual federal tax credit.

A Mortgage Credit Certificate is a federal income-tax credit issued by your state or local housing finance agency. Every year you pay mortgage interest, you take a percentage of that interest as a direct credit on your federal return — capped on most programs at $2,000/year.

See if I qualifyAll program types →

How it works.

  1. Step 01

    Your lender requests an MCC at closing.

    The MCC has to be issued by the housing finance agency at the time you originate your first mortgage. You cannot add one after the fact.

  2. Step 02

    Every year you pay mortgage interest.

    You file your federal return as usual and add IRS Form 8396 to claim the MCC credit.

  3. Step 03

    You take the credit each year for the life of the loan.

    It's not a one-time benefit. As long as the loan stays in place and the home stays your primary residence, you get the credit every year.

What you need.

  • First-time buyer (most programs) — 3-year lookback in many states
  • Income and purchase-price limits set by the issuing agency
  • Paired with a qualifying first mortgage (FHA / VA / conventional)
  • Owner-occupied primary residence

Real programs.

  • Various State HFAs

    US

    Up to $2,000/yr federal income tax credit, every year you own the home.

  • TSAHC MCC

    TX

    Texas State Affordable Housing Corporation MCC, stacks with TSAHC DPA.

  • CalHFA MCC

    CA

    Layered on top of CalHFA first mortgages.

Questions people ask.

Is an MCC a tax deduction or a tax credit?
A credit. It comes off your tax owed dollar-for-dollar, which is materially better than a deduction.
What if I refinance the home — does the MCC go away?
It can. Many agencies allow a reissued MCC after refi — your lender has to request one as part of the refi. Without that step, the credit ends.
Can I claim the MCC if I work from home?
Yes, as long as the home is your primary residence. Office-use within a home doesn't disqualify the credit.

See which mcc tax credits you qualify for.

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