Texas Department of Housing and Community Affairs
Texas Source for MCC Credits
First time Texas home buyers, veterans, military members and buyers in targeted census tracts can obtain a mortgage credit certificate (MCC) by borrowing for a new home via a lender registered with the Texas Department of Housing and Community Affairs (TDHCA). TDHCA issues the mortgage credit certificate (MCC).
Qualified Texas MCC Lenders
TDHCA participating lenders registry link is here. A TDHCA lender can help you obtain a home loan from all available home loan programs plus get your own mortgage credit certificate (MCC) at closing on your home loan if your qualified to receive an MCC saving up to $2,000 annually by increasing you tax refund which effectively lowers your interest cost.
Texas MCC Percentage on your new home loan
The Texas MCC tax credits range from 20% to 30% of mortgage interest incurred annually. Size of loan determines percentage. Up to $2,000 is annual MCC tax credits can be claimed on your personal tax return as extra refund annually. TDHCA MCC Information is linked here. The MCC percentage is 30% up to $175,000 and 20% for $175,000 plus mortgages. This is your tax credit percentage times your mortgage interest on annual form 1098 equals your tax credit or $2,000 whichever is lower. While the interest rate may be slightly higher on these MCC loans the up to an extra $2,000 refund can equate to a 1% to 2% lower annual interest rate savings.
Texas Limits on Annual Income and Maximum House Cost
The TDHCA income limits and home purchase amount limits are listed here. Most Texas first time buyers will have income below these limits and home purchases below the maximum amount. TDHCA MCCs can not be issued unless a TDHCA loan is obtained for the first time home buyer or active military or veteran homebuyer. The TDHCA loan programs include assistance to move the 20% downpayment to lower affordable amounts. Houses purchased in designated HUD economically disadvantaged census tracts do not require the homeowner to be in a special class as long as the buyer meets the income and housing costs limits they can qualify for a mortgage credit certificate (MCC).
Texas First Time Homebuyers Education Requirements
Homebuyer must complete a pre-purchase homebuyer education course prior to loan closing. This requirement can be satisfied through: Texas Statewide Homebuyer Education Program – Homebuyers can complete an in-person/face-to-face course available through a certified homebuyer education provider. HUD-approved, non-profit organization or government entity, or a HUD-approved online course (verify course approval with TDHCA prior to completion); OR “Becoming A Homeowner” - TDHCA’s FREE Online Homebuyer Education course available through Texas Homebuyer U but a Certificate of Completion is required.
Texas MCC Fee at Closing
In addition to the regular closing costs associated with the loan, there is a MCC Issuance Fee of $400.00 due upon closing. Please check with lender for current applicable fees. Loans made in this program are subject to recapture tax provisions, under federal law.
Texas MCC Refinance Process
If your TDHCA original mortgage is refinanced and TDHCA issued your MCC you will need to fill out the refinancing application to receive a revised MCC certificate. Upon review of the information, TDHCA will reissue you a new certificate. For more information click on the form Refinancing of MCC Loan Application.
Texas MCC Lost Certicate
What happens if I lose or misplace my MCC? Please contact Erick Soriano at 512-475-3962 for a replacement certificate. There is a $50.00 fee for this service