The Mortgage Credit Certificate program

This program is used with the Step Up program or any other 30-year, fixed-rate mortgage. It gives a federal tax credit based on interest paid each year.

Requirements for a Mortgage Credit Certificate

  • Be a first-time home buyer (or have not owned a home in the last three years)
  • Must buy a new or existing home. Refinancing does not qualify
  • Must buy a home in Alabama and occupy it, as your primary residence.
  • Must meet federally established income and sales price limits
  • Must have a 30-year, amortizing loan..


The amount of mortgage credit allowed varies depending on the state or local government that issues the certificates, but is capped at a maximum of $2000 per year if your State's rate is over 20%,by the IRS. As an example, if a homebuyer were to receive an MCC that offers a 30% credit on a $200,000 loan for 30 years with a rate of 6%, the allowable tax credit would be figured as follows (all numbers rounded):

  • Mortgage Interest Paid (1st Year): $11,933
  • x MCC Credit: 30%
  • = Total Credit: $3579

Because the total credit in this example exceeds the IRS limit of $2000, the homebuyer would report a $2000 credit on their tax return. The buyer may continue to receive a tax credit for as long as they live in the home and retain the mortgage.


Get a free copy of your credit report


This information is a summary only and not to be used to make financial decisions. Contact an experienced local lender for full and current information


Mortgage Credit Certificate program Huntsville AL      Huntsville al real estate Mortgage Credit Certificate program

Huntsville al real estate Mortgage Credit Certificate program  Huntsville al real estate Mortgage Credit Certificate program

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