Mortgage Tax Credit

The Mortgage Credit Certificate (MCC) Program enables qualifying home buyers within the program areas to receive a federal income tax credit on federal income taxes.  The tax credit is equal to 50 percent of the mortgage interest paid on the first $40,000 loan principal with a $2,000 annual maximum credit.  The tax credit is a dollar-for-dollar reduction in the federal tax due, not just a deduction from gross income.  The program provides assistance to low to moderate income level families for the purchase of a single family home as their principal residence.  Certain income limitations apply.  This program is made possible by the Tax Reform Act of 1986.

In addition to the tax credit, a MCC holder is still able to take the standard mortgage interest deduction.  That deduction is limited to the mortgage interest paid during the year minus the amount of the tax credit for that year.  If a holder’s tax liability is less than the amount of the credit for the year, the unused portion of the tax credit may be carried forward and used during any of the next three years. The borrower should consult their tax advisor or the Taxpayer Assistance Department of the Internal Revenue Service (1-800-829-1040) regarding the actual effect of the tax credit on their tax obligations.

Area Served:

Adair, Brian, Canadian, Cherokee, Cleveland, LeFlore, Pittsburg, Pottawatomie, Muskogee. 

Note:  Areas served are subject to change.  Contact (405) 364-6565 for an updated list.

Eligibility Requirements:

Guidelines and eligibility requirements vary depending on whether it is Target or Non-Target area.  Contact MCC Administration to determine whether or not a particular home is in a Targeted or Non-Targeted area.

• Annual gross income and home price must fall within limits set by federal law.  Income and home price limitations are subject to change without notice.
• In Non-Targeted areas, homebuyer must not have owned a residence for the last three years. This does not apply to Targeted areas.
• Homebuyer must occupy the home as principal residence within 60 days after the financing is provided.  Homes purchased for recreational or investment purposes, or ones used in a trade or business, are not eligible.

Types of Mortgage Loans

Almost any type of conventional loan qualifies for the program.  The mortgage loan must be a new mortgage.

How to Apply

After you locate a home, find a lender and have an approved purchase contract but before you have closed on your loan:

Contact:  MCC Administration

                PO Box 1568

                Norman, OK 73070

                (405) 364-6565

Recapture

In some instances, if homebuyer sells the home within 9 years, homebuyer may have to pay a part of the credit back.

NOTES: The homebuyer must have applied and been approved for a MCC before the loan is closed and program fee has been paid.  Tax credit is available each year owner continues to live in the home and pay mortgage interest MCC’s are available on a first come, first serve basis, or until the maximum amount of certificates available have been issued or until the end of the program period.

Information provided by MCC Administration to the Office of Disability Concerns