mortgage credit certificate product

OHFA's Mortgage Credit Certificate (MCC) product can help some families realize the dream of homeownership. The MCC product creates an income tax deduction that reduces a household's federal income tax liability and allows the household to have more available income to make mortgage payments.

Follow this link if you are already an MCC holder.

How Does the Mortgage Credit Work?

Homebuyers who qualify for the product receive a Mortgage Credit Certificate from OHFA, which can be used to reduce their household's tax burden every year for the life of their mortgage loan. With an MCC, a percentage of what you pay in mortgage interest (20%, 25%, 30%, or 40%) becomes a tax credit that you can deduct dollar-for-dollar from your income tax liability. The remaining 80%, 75%, 70%, or 60% of your mortgage interest continues to qualify as an itemized tax deduction, as long as you have sufficient tax liability.

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How Big Will My Tax Credit Be?

The percentage of the annual tax credit is based on the location and/or status of your property:

  • 20% credit for non-target area homes
  • 25% credit for target area homes (download a list of Ohio's target areas from our download center or visit our target area maps page)
  • 30% for Real Estate Owned (REO) properties (30% of the purchase of a single family property from HUD, Fannie Mae, Freddie Mac, VA, USDA-RD, or a financial institution that acquired the property through foreclosure)
  • 40% if homebuyer uses an OHFA loan

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How is Mortgage Credit Calculated?

Imagine you pay $5,360* in interest on your home during the first year. If that home is in a Non-Target Area you can claim 20% of the interest or $1,072 as a direct tax credit; meaning you will free up $1,072 to help make your loan payments. In a Target Area you could claim up to 25%, Real Estate Owned Home 30%, and OHFA Loan up to 40% (Up to a maximum credit of $2,000).

*$5,360 is approximately what you would owe in interest during the first 12 months on a $90,000 fixed-rate mortgage at 6% interest.

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Do I Qualify?

Applicants for OHFA's Mortgage Credit Certificate product must meet OHFA's income and purchase price limits. The limits vary by county. Check income and purchase price limits.

To qualify for an MCC, you must also:

  • Meet one of the following:
    • Be a first-time homebuyer—someone who has not owned or had an ownership interest in his/her principal residence in the last three years;
    • Purchase a home in a target area—an economically distressed area designated by the U.S. Department of Housing and Urban Development (HUD), (download Ohio's target areas from our download center or visit our target area maps page); or
    • Be Active Military or a Veteran.
  • Occupy the property you are buying as your primary residence for every year you claim the MCC. If the property ever ceases to be your primary residence, OHFA may revoke your MCC approval.
  • Be creditworthy. You must meet standard credit and underwriting criteria established by the IRS and HUD for the MCC product. See IRS Publication 530.

Additional Property Requirements:

  • New or existing single-family units, condominiums, and planned unit development homes.
  • Modular or manufactured homes must be permanently affixed to the foundation and titled as real estate to be eligible.

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How to Apply

If you meet the eligibility criteria defined above, you can apply for an MCC when you apply for a mortgage loan at any of our participating lenders. Find a participating lender.

In order for the lender to process your application for a housing loan and MCC, you will need:

  • A signed purchase contract
  • Signed and dated copies of your federal income tax returns. All applicants for the loan must provide copies for the past three years.
  • Recent pay stubs
  • The names, addresses, contact persons, and telephone numbers of your employer(s)
  • Savings and checking account information including names and addresses of institutions and account numbers
  • Creditor information including names and addresses of creditors, account numbers, and balances
  • Landlord information including names, addresses, and dates of rental

The lender may also require you to pay an application fee at the time of the application.

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Loan Types

Different lenders offer different types of mortgage loans with various features and fees. Lenders' requirements for these loans also vary. The lender you choose can help you understand your options.

Keep in mind that to be eligible for an MCC, your loan must:

  • Be a new mortgage loan—you cannot obtain an MCC if you are refinancing an existing mortgage loan.
  • Be a fixed-rate loan—you may choose the fixed-rate loan that best meets your needs. Conventional, FHA, VA, or USDA-RD mortgages all qualify for the product.

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How Can I Find Foreclosed REO (Real Estate Owned) Properties in Ohio?

Borrowers interested in locating foreclosed REO properties in Ohio can select from the links below:

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About Recapture Tax

OHFA will reimburse borrowers for the full amount of any recapture tax in the rare instances where tax repayment is required. Learn more...

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MCC Reissuance Fee -- effective 1/14/2013

Effective January 14, 2013, OHFA will implement a Mortgage Credit Certificate (MCC) Reissuance Fee of $55.00
(no personal checks). This fee will apply to MCC loans being refinanced and need to have the original MCC Certificate reissued. No personal checks will be accepted. Payments can either be made via cashier check or money order.

  • $55 reissuance fee (no personal checks)

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Downloadable Information

You can download information about our loan products from our download center.

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Your lender and/or real estate agent can guide you through the home buying process and answer any questions you may have regarding OHFA's MCC product. You can also check out our homeownership FAQs.

If you need additional information, please contact:

Office of Homeownership
Ohio Housing Finance Agency
57 East Main Street
Columbus, Ohio 43215

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The Ohio Housing Finance Agency is an Equal Opportunity Housing entity. Loans are available on a fair and equal basis regardless of race, color, religion, sex, familial status, national origin, military status, disability or ancestry.


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