Ask The Experts: Question of the Week
Our loan scenario desk experts receive thousands of questions from our subscribers.
Our experts work in the field and have over 25 years of experience, which is why they are known for saving a lot of deals.
We hope you learn something new!
All Agencies – Mortgage Credit Certificates – MCC
Question:
One of the originators in my area is advertising the benefit of a Mortgage Credit Certificate for first-time homebuyers. I’ve lost a couple of loans to him over this issue, so I’m trying to figure out how this works. It seems like this may be a tax benefit and a way to add more income to help borrowers qualify. Who offers this program, and how does it work?
Answer:
Mortgage Credit Certificates are offered in each state and are a tax credit for the borrower on that home. The tax credit can be used every year, so that agencies will consider the credit as income. These programs help borrowers in the low-moderate income range buy their first home. Each state is different, so it’s essential to understand the credit percentage, the rules for receiving the MCC, and how to calculate the tax credit for qualifying purposes. Our site has a fantastic online training program that covers the entire process, calculations, and tax considerations. I recommend that you review this course if you intend to offer this in your market.
Resource:
Subscribers can access the MCC Part One and MCC Part Two training classes under our “Online Training” tab.