Tax season is upon us, so it’s time to take a look at one of the most financially powerful tools for potential homebuyers: The Mortgage Credit Certificate. This federal incentive helps your customers boost their purchasing power. Available to Alabama homebuyers only through AHFA, the MCC gives homebuyers an annual tax credit to reduce federal income tax. The credit is equal to a specified percentage of annual mortgage interest paid for every year of the life of the loan. As an added bonus, the remaining annual interest can still be claimed as a mortgage interest deduction on the homebuyer's federal tax return.

“Using an MCC can save your customers literally thousands of dollars on their tax bills this time next year,” said AHFA Single-Family Administrator Carrie Hamaker. “That savings frees up income so they can qualify for a nicer home.”

See below for some real-world savings scenarios based on actual properties listed for sale on Realtor.com as of March 3, 2023.*

*Sample calculations are based on a 6.875% conventional, fixed-rate, 30-year mortgage. All scenarios may vary depending upon each taxpayer’s unique income tax considerations.

“Multiply these monthly savings over the life of a 30-year loan, and you’ll see what a difference the MCC makes,” said Hamaker. “Homebuyers should be forever grateful to the lenders and realtors who offer them the incredible savings opportunity of an MCC.”

Qualified homebuyers will receive a larger federal tax break or tax refund each year or benefit from immediate savings by updating the withholdings on their W-4 form. MCCs also may be paired with AHFA's Step Up program, adding up to $10,000 in down payment funds to the MCC savings. 

• MCCs are available with 30-year, fixed-rate, amortizing conventional, FHA, VA, Rural Development, and privately insured mortgages.
• Applications are accepted on a first-come, first-served basis by a statewide network of more than 60 participating lenders.
• Participants must meet federally established income and sales price limits.
• For more information, call AHFA at 800-325-2432 or visit ahfa.com/homebuyers/programs-available/mccs.

Thank you to LanMac Realty, LLC for allowing AHFA to talk March 7 about the benefits of our homebuyer programs and how they can help real estate professionals sell more homes! Thanks also to Deborah Hill and Kimberly Lumpkin with Synovus Bank in Montgomery for sponsoring the visit and providing lunch.

Our Step Up down payment assistance program and Mortgage Credit Certificates help make homebuying more affordable and help more people qualify to buy a home.

Are you a mortgage professional or Realtor and want to know more about AHFA programs? AHFA offers on-site training on our programs that covers borrower and property eligibility, processing, documentation, income calculations and more. 

To schedule an informational visit or training session, simply email Alana Beaugez at abeaugez@ahfa.com.