# Mortgage credit certificate (MCC)

> A mortgage credit certificate, issued by a state or local housing agency, turns part of the mortgage interest you pay each year into a federal tax credit.

URL: https://mail.mortgage-math-us.com/glossary/mortgage-credit-certificate/  
Last reviewed: 2026-10-29 · By the MortgageMath US Editorial team

## Quick answer

**A mortgage credit certificate (MCC)** is a certificate from a state or local housing agency that lets a qualifying homebuyer claim a federal tax credit each year for a set percentage of the mortgage interest paid — between 10% and 50%, depending on the program. You claim it on IRS Form 8396.

## Key facts

| Fact | Value | Source | As of |
|---|---|---|---|
| Lowest certificate rate | 10% | [IRS Form 8396](https://www.irs.gov/pub/irs-pdf/f8396.pdf) | Tax year 2025 |
| Highest certificate rate | 50% | [IRS Form 8396](https://www.irs.gov/pub/irs-pdf/f8396.pdf) | Tax year 2025 |
| Yearly cap when the rate is above the threshold | $2,000/yr | [IRS Form 8396](https://www.irs.gov/pub/irs-pdf/f8396.pdf) | Tax year 2025 |
| Unused credit carries forward | 3 years | [IRS Form 8396](https://www.irs.gov/pub/irs-pdf/f8396.pdf) | Tax year 2025 |

## How the credit is figured

> **Worked example: A $300,000 loan at 7.24%**
>
> First-year interest: $21,625. With a 20% certificate, the credit is $4,325. If you itemize, you can still deduct the other $17,300 of interest — the deduction is reduced by the credit.

At certificate rates above 20%, the credit is capped at $2,000/yr. The credit can’t exceed your federal tax for the year, but unused credit carries forward for up to 3 years.

## Who can get one

You generally apply through a participating lender before closing, as part of the purchase. Programs generally require that you haven’t owned a main home in the past 3 years, and cap income and purchase price. If you sell within 9 years at a gain and your income has risen past set limits, you may owe a recapture tax. The [MCC guide](https://mail.mortgage-math-us.com/first-time-buyers/mortgage-credit-certificates/) covers limits and recapture in detail.

## Related terms

- [First-time homebuyer](https://mail.mortgage-math-us.com/glossary/first-time-homebuyer/) and [down-payment assistance](https://mail.mortgage-math-us.com/glossary/down-payment-assistance/)

## Sources

- [Freddie Mac Primary Mortgage Market Survey](https://www.freddiemac.com/pmms) — 30-year fixed rate, national weekly average (Week of Oct 29, 2026)
- [IRS Form 8396](https://www.irs.gov/pub/irs-pdf/f8396.pdf) — Mortgage credit certificate rate, lowest; Mortgage credit certificate rate, highest; Mortgage credit certificate: the yearly dollar cap applies when the rate is above (Tax year 2025)
- [26 U.S.C. 143(d)](https://www.govinfo.gov/link/uscode/26/143) — MCC and mortgage revenue bond loans: no ownership interest in a principal residence in the past (Oct 28, 2026)
- [IRS Form 8396: Mortgage Interest Credit](https://www.irs.gov/pub/irs-pdf/f8396.pdf)

_General information, not financial advice._