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
How the credit is figured
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 covers limits and recapture in detail.
Related terms
Sources
- Freddie Mac Primary Mortgage Market Survey — 30-year fixed rate, national weekly average (Week of Oct 29, 2026)
- IRS Form 8396 — 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) — MCC and mortgage revenue bond loans: no ownership interest in a principal residence in the past (Oct 28, 2026)
Last reviewed Figures are checked against the sources above. Read our editorial policy. This page is general information, not financial advice — see the disclaimer.