MCC tax credit for first time home buyers
First Time Home Buyers!
ASK FOR THE MCC tax credit! This one tax credit first time home buyers can use. A first time home buyer is ANYONE that has not owned a property in the last three years. Even if you owned a house more than a few years ago, you would still qualify) The Mortgage Credit Certificate (MCC) is one such program. The MCC program gives you a tax credit of 20% of the mortgage interest you pay in a year. The example below is for a $325,000 purchase price with an interest rate of 4%.
Without an MCC
Annual Income
Mortgage Interest
to deduct
Taxable Income
(assume 15% tax rate)
Federal Income Tax
Total Income Tax Owed
$50,000
$10,000
$40,000
$6,000
$6,000
With an MCC
Annual Income
Mortgage Interest
to deduct (80% total)
Taxable Income
(assume 15% tax rate)
Federal Income Tax
Minus 20% MCC Credit
Total Income Tax Owed
Net gain from MCC
(First Year)
$50,000
$8,000
$42,000
$6,300
($2,000)
$4,300
$1,700
Source: https://www.fdic.gov/consumers/community/mortgagelending/guide/part_2_docs/mortgage_tax_credit.pdf
The annual savings of $1,700 is the same as $167 per month. This is equivalent to getting an interest rate of 3.375%.
A SAVINGS OF .625% IN INTEREST!!!
All you need in Orange County to qualify for this program is to make less than $131,160 for one of two people and be a first time home buyer of an owner occupied condo or house.
Orange County First Time Homebuyers 