Mortgage Credit Certificate Program

Mortgage Credit Certificate (MCC) Program

Effective October 31, 2016, all funds have been committed. New funds will be available on January 1, 2017.

WHAT IS AN MCC?
The MCC Program offers qualified first-time homebuyers a federal income tax credit.  The federal credit can reduce potential federal income tax liability, creating additional net spendable income for qualified first-time homebuyers to possibly use toward their monthly mortgage payment. This MCC Program enables qualified first-time homebuyers 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. The qualified homebuyer is awarded a tax credit of up to 20% of the annual interest paid on the mortgage loan. The remaining 80% of the mortgage interest will continue to qualify as an itemized tax deduction..
 

HOW DO I APPLY?
The County does not make loans. You, the homebuyer, go through the normal process of choosing a realtor, finding a house, condominium, townhouse, mobile home or two unit properties (duplex) and arranging financing with a participating lender.  If you and the home you are buying are eligible, the lender fills out the MCC application forms for you, and sends them to the County for review. If approved, the County will then issue an MCC.

After you receive your MCC, you can take the income tax credit every year, as long as you keep the original first mortgage and continue to live in the house as your principal home.

INCOME TAX DETAILS
The MCC reduces the amount of federal income taxes due to the federal government from the homebuyer. If the MCC credit is greater than the homebuyer's tax liability, the IRS will allow the credit to be carried over for the next three years. 

You may wish to adjust your federal income tax withholding to receive the MCC benefit monthly.  Talk to your payroll department at your place of work.  By reducing your monthly withholding, you will have more disposable (after-tax) income for mortgage payments.

WHAT IS THE DIFFERENCE BETWEEN A "TAX CREDIT" AND A "TAX DEDUCTION?"
A tax deduction is subtracted from your adjusted gross income before you calculate your federal income taxes.  A tax credit, on the other hand, entitles you, the taxpayer, to subtract the credit from your total federal income tax bill.  We are not tax advisors.  If you have any questions about how your taxes will be affected, you should contact your tax accountant, or the IRS, at (800) TAX-1040.

MCC Program Details

  • Participating Lenders

  • Participating Cities

  • IRS Census Tracts

  • Eligibility Requirements

Contact Information

Silvia Delgadillo, Program Manager
Phone:     (626) 586-1838
Email:      Silvia.Delgadillo@lacdc.org