Mortgage Credit Certificates (MCC's) can help first-time homebuyers purchase homes in Pleasanton and other areas of Alameda County.  Through the use of an MCC, eligible home buyers increase their ability to qualify for a mortgage loan and reduce their effective mortgage interest rate approximately 1.5 percentage points.  MCC recipients may take 15% of their annual mortgage interest payments as a dollar-for-dollar tax credit against their federal income taxes.  The home buyer adjusts federal income tax withholdings, increasing income available to pay the mortgage.  The MCC Program is coordinated in Pleasanton by the Alameda County Housing and Community Development (HCD) Department.

How the MCC Benefits the Home Buyer

A home buyer with an 7% fixed rate 30-year mortgage of $300,000 would pay approximately $20,900 in interest payments for the first year.  With an MCC, up to $3,135 (15% of $20,900) of the interest could be taken as a tax credit against the home buyer's federal income taxes, effectively reducing the monthly mortgage payment, and helping the home buyer qualify for and support a mortgage.

Who Qualifies?

• First Time Home Buyers - The home buyer cannot have owned a principal residence within the last three years.
  
• Income - The home buyer's total household income cannot exceed $82,200 for 1 or 2 person household or $94,530 for a 3 or more person household.
  
• Owner Occupancy - The home buyer must live in the house being purchased with an MCC-assisted mortgage.
  
• Eligible Properties - An MCC may be used for the purchase of new or existing single-family homes including single-family detached homes, mobile homes, condominiums, townhouses, or duplexes.  Three or more unit properties are not eligible for MCC-assisted mortgages.
  
• Purchase Price - The purchase price of the house cannot exceed $543,617 for new units (never previously occupied) or $526,123 for existing units (resale).

Program requirements are subject to change.  If you are considering an MCC-assisted purchase, verify these policies with your lender.

How to Apply for an MCC

To obtain an MCC, the home buyer selects a real estate agent, locate an eligible property, signs a purchase agreement, and arranges financing with a participating lender (a list of participating lenders can be obtained from HCD).  The home buyer pays a non-refundable application fee of $500.  The lender determines home buyer eligibility and forwards the MCC application to HCD for approval.

Recapture

Recapture is an IRS rule that may increase the amount of tax you pay when you sell your home.  The amount of recapture will depend on the year in which you sell, your income that year, and the amount of gain you receive from the sale.  If you sell the house more than nine years after the closing date, you will not have to pay additional taxes.  Your lender can provide more details.

For More Information About the MCC Program

Your participating lender or realtor can provide you with program information.  For a list of participating lenders, contact the Alameda County Housing and Community Development (HCD) Department at 510-670-5799 (hearing impaired: 510-265-0253).

NOTE: It is illegal for any housing provider to discriminate on the basis of age, sex, race, physical handicap, marital status, sexual preference, or religion. If you have been unlawfully discriminated against, or you have questions about your rights, contact ECHO Housing at 510-581-9380 or 925-449-7340.