AHFA Mortgage Credit Certificate
Mortgage Credit Certificates (MCCs) offer a way to reduce federal tax liability by applying a tax credit based on a portion of the mortgage interest paid each year. This credit directly lowers the amount of federal tax due. You can still deduct any interest not covered by the MCC as mortgage interest on your federal tax return.
You can combine this MCC with the AHFA’s Step Up program or any 30-year fixed-rate mortgage that is fully amortized and is offered through a participating lender.
The rate of the mortgage credit varies depending on the size of the loan:
For loans exceeding $150,000, a 20% MCC is provided without a maximum annual credit limit.
For loans between $100,001 and $150,000, a 30% MCC is available, with the annual credit capped at $2,000.
For loans of $100,000 or under, a 50% MCC is offered, also with an annual credit limit of $2,000.
Get more details on the AHFA website. And take a look at HUD’s list1 of alternative programs for Alabama.