At the NC Housing Finance Agency, we provide loan products to make home ownership more affordable for North Carolinians. The Mortgage Credit Certificate (MCC) enables eligible first-time buyers and military veterans to save up to $2,000 a year on their federal taxes. In addition, persons who buy homes in certain targeted census tracts may be eligible for the MCC program, even if they are not first-time home buyers.This leaves you with more money to put toward your mortgage payment. If you qualify, you can claim a federal tax credit for 30% of the interest you pay on an existing home (50% on new construction)—up to $2,000 per year for every year you live in your home. You may also be eligible for our NC Home Advantage Mortgage™ with down payment assistance to boost your savings even more! We offer these products statewide through participating lenders.
How Does an MCC Work?
Here’s an example. On a $148,000 mortgage with an interest rate of 4.5%, you might pay $6,660 in interest the first year. The MCC would allow you to take a federal income tax credit of $1,998 ($6,660 x 30%) for that year. Please note that you can still claim a mortgage interest deduction for the remaining 70% of the mortgage interest you paid.
You don’t have to wait until tax time to reap the benefits of an MCC! Once you calculate your annual tax credit, you can revise your W-4 with your employer to reduce the amount of federal taxes withheld from your pay check. That $1,998 tax credit could then translate into an additional $167 in your monthly paycheck–money you can put toward your mortgage!
See below to see if you and the property you are interested in are eligible for a Mortgage Credit Certificate and to learn how to get started.