How the NC Home Advantage Tax Credit Can Make Home Buying Affordable

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With home prices and interest rates climbing, first-time home buyers in North Carolina may feel discouraged in their home buying journey. The NC Housing Finance Agency has resources that can help, including the NC Home Advantage Tax Credit. This mortgage credit certificate (MCC) administered by the North Carolina Housing Finance Agency can save first-time home buyers thousands on their tax liability every year for the life of their mortgage loan. Learn the basics of this money saving tool, whether you may be eligible and how the NC Home Advantage Tax Credit can put more money back into your pocket to help you afford your home for the long term.

What is a Mortgage Credit Certificate?
A mortgage credit certificate is a tax credit that first-time home buyers and military veterans can use to help make their homes more affordable. The NC Home Advantage Tax Credit offers a 30% federal tax credit for existing homes or a 50% tax credit for new homes—up to $2,000 every year for as long as you hold the mortgage. This tax credit reduces your federal tax liability which means you will have less to pay in taxes each year, leaving more money in your pocket to use toward your mortgage. The Agency administers the Mortgage Credit Certificate for North Carolina through its participating lenders.

Am I Eligible?
Eligible home buyers must:

  • Be a first-time home buyer or a qualified military veteran
  • Meet certain income limits
  • Meet certain sales price limits 
  • Be purchasing a primary residence in North Carolina

How does the NC Home Advantage Tax Credit Work?
If you are eligible, your lender will reserve the NC Home Advantage Tax Credit for you when you are qualified for a home loan. Then, for every year of your loan, you will be able to reap the tax savings. As an easy example, if you borrowed a loan amount of $100,000 at an interest rate of 5% for 30 years, you can expect to pay $5,000 in interest in the first year of your loan. With the NC Home Advantage Tax Credit (at 30 percent), you will be eligible to receive a federal income tax credit of $1,500 (30 percent of $5,000). Using this tax credit, you will get more money back with your tax return each year, as long as you are paying your mortgage loan.

Can I Combine the NC Home Advantage Tax Credit with Other NC Home Advantage Products?
You can combine tax saving benefits of the NC Home Advantage Tax Credit with the NC Home Advantage Mortgage™, or any other home loan. Interested in learning more about this money-saving tool or applying for the NC Home Advantage Tax Credit? Contact one of our participating lenders to see if you qualify. If you do, your lender can submit your reservation when you purchase your first home.

Talk to your lender for more information about the NC Home Advantage Tax Credit, the NC Home Advantage Mortgage™ or any of the other NC Home Advantage suite of home buyer products that can help make home ownership more affordable for you, or visit us online at