What is a Mortgage Credit Certificate?
The Mortgage Credit Certificate Program was authorized by Congress in the 1984 Tax Reform
Act as a means of providing housing assistance to families of low and moderate income. The
Hawaii Housing Finance and Development Corporation (HHFDC) is an Issuer of Mortgage
Credit Certificates.
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The Mortgage Credit Certificate (MCC) reduces the amount of federal income tax you pay,
thus giving you more available income to qualify for a mortgage loan and assist you with
house payments.
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The MCC is available to homebuyers who meet household income and home purchase price
limits established for the MCC Program, as well as other federal eligibility regulations.
How will a Mortgage Credit Certificate assist my home purchase?
The federal government allows each homeowner to claim an itemized federal income tax
deduction for the amount of interest paid each year on a mortgage loan.
For a homeowner with a MCC, this benefit is even better:
• 20% of your annual mortgage interest will be a direct federal tax credit, resulting in a
dollar-for-dollar reduction of your annual federal income tax liability.
• The remaining 80% of your annual mortgage interest will continue to qualify as an
itemized tax deduction.
The amount of your mortgage credit depends on the amount of interest you pay on your
mortgage loan. However, the amount of your mortgage credit cannot exceed the amount of
your annual federal income tax liability. Unused mortgage credit can be carried forward for
three years to offset future income tax liability.
(information from HHFDC)