Nevada State Mortgage Credit Certificate (MCC) Program
A Mortgage Credit Certificate
, also known as MCC
, enables first-time home buyers and military veterans to convert a portion of their annual mortgage interest into a direct dollar for dollar tax credit on their U.S. individual income tax returns; therefore lessening the overall amount owed on their federal taxes. The Mortgage Credit Certificate (MCC) Tax Credit is a federal credit that reduces potential federal income tax liability. Thereby adding net spendable income that can be used by borrowers toward their monthly mortgage payment. The amount is calculated based on the mortgage interest paid during the year through the monthly payments.
You may use a mortgage credit certificate (MCC) in conjunction with a first mortgage from a participating lender
Key Benefits of the Mortgage Credit Certificate (MCC)
- Federal income tax credit equal to 40% of the interest paid on a mortgage loan (maximum $2,000 tax credit per year) Savings will continue each year based on the actual mortgage interest paid
- You may claim the remaining interest as a tax deduction
- A $400 discount is available when combining with the Home Is Possible Down Payment Assistance Program
- Savings estimated at $2,000, or $166 a month, a year per household
- Savings continue each year based on actual interest paid on the home
- No asset limits for homebuyers
- Home-owners may adjust their federal W-2 to receive a higher income each month or they may take the credit as a refund when they file their tax return each year. You will need an MCC file form 8396 each year in order to qualify for the Tax Credit; if you do not use all of the Tax Credit each year, you may carry the balance over for up to three years.
Program Requirements for the Mortgage Credit Certificate (MCC)
- Borrowers must be first-time homebuyers who have not owned their principal residence during the last three years or qualified veterans who will live in the home as their primary residence
- Borrower must meet normal mortgage underwriting requirements in order to demonstrate creditworthiness
- Borrowers who are purchasing a house in the state of Nevada
- Households meeting the maximum income and purchase price limits for the area in which they are purchasing the home
- There is a flat program fee of $795 and a $300 lender application fee
Starting from October 1, 2015, qualified veterans will be able to waive their MCC fees, with the exception of a $300 lender application fee.
Duration of Mortgage Credit Certificate (MCC)
You can compute the mortgage credit certificate (MCC) each year as long as the house is your main residence; however, if you refinance the mortgage, the MCC cannot be used on the new loan. In addition, if you sell the property, the credit is not allowed to be transferred to the next owner.
If the house does not remain your main residence for the first 9 years of the loan, there is a recapture clause. Once the 9 year period has lapsed, you no longer have to worry about paying the recapture penalty.
You may recover the MCC fee through the income tax credit within the first year. You may pay the fees either by the seller, the buyer or jointly.
For further details and to check if you qualify for the contact Casey Moseman or Visit the websites for Nevada Rural Housing Authority
or the Nevada Housing Division