All things related to the IHDA MCC Program. 

(suspended effective 6/17/2020)

M

C

C

ortgage

redit

ertificates

 

INTRO TO MORTGAGE CREDIT CERTIFICATES

What is an MCC, and how can it benefit my borrower?

ELIGIBILITY AND PROGRAM REQUIREMENTS

Details on who can apply and with which programs the MCC can be used.

MCC

FAQs

MCC specific frequently asked questions.

FORM

IRS-8396

This IRS form is designated for holders of qualified mortgage credit certificates Issued by state or local governmental units or agencies. IHDA cannot give tax advice; borrowers should contact their tax professional for tax advice on filling with their Mortgage Credit Certificate.

MCC

DOCUMENT SET

Contains all documents required for the MCC Program. 

MCC

REISSUANCE

Homeowners that already have a MCC may request an reissuance after refinancing. Click here for instructions and guidelines.

FORM

IRS-8329

Lenders must file an annual report with the IRS using form 8329. IHDA sends a cumulative a year-end MCC report to help lenders complete this form.

 
 

Program Guidelines

The MCC entitles the borrower to take a federal income tax credit. The tax credit is in the amount of 25% of their paid mortgage interest. The MCC is registered with the IRS, and is effective year after year (up to 30 years), as long as the homeowner resides in the home and continues to pay mortgage interest on the initial loan. In some cases the borrower can apply for a re-issuance of the MCC in the event of a refinance, to continue to take advantage of the MCC tax credit.

Eligibility

  • Available only in conjunction with the IHDA Access Programs.

  • Borrowers must be first-time homebuyers (or Exempt*).

  • Borrower must be below county MCC income limits. (The income limits on a loan taking a MCC are more restrictive than our general limits and are based on the number in the household.)

  • Borrower must be below county MCC purchase price limits.

  • Property must be a qualified dwelling situated on less than 5 acres of land.

  • (*Exempt = a qualified veteran (borrower must be a veteran), or property is in a targeted area. Note that if only the spouse is a veteran, the spouse must also be a borrower/mortgagor and obligated on the Note.)

  • $350.00 - Payable to Illinois Housing Development Authority

  • $150.00 - Optional fee that may be charged by the originating lender
    (Both fees must appear on the CD for the 1st Mortgage)

Fees

 

Frequently asked questions

With which programs can I use the MCC?


Eligibility:

  • Available only in conjunction with the IHDA Access Programs.
  • Borrowers must be first-time homebuyers (or Exempt*).
  • Borrower must be below county MCC income limits. (The income limits on a loan taking a MCC are more restrictive than our general limits and are based on the number in the household.)
  • Borrower must be below county MCC purchase price limits.
  • Property must be a qualified dwelling situated on less than 5 acres of land.
(*Exempt = a qualified veteran (borrower must be a veteran), or property is in a targeted area. Note that if only the spouse is a veteran, the spouse must also be a borrower/mortgagor and obligated on the Note.)




When do MCC documents need to be signed?


When do MCC documents need to be signed? All MCC documents should be signed prior to close with the exception of the following documents, which must be signed on or after closing:

  • MCC 32 – Borrower Closing Affidavit
  • MCC 33 – Lender Closing Certification
  • MCC 35 – Final Recapture
Refer to the MCC Data Entry form (found in the document library) for the full list of required documentation.




Can I use the MCC to qualify the borrower?


IHDA does not have overlays on using an MCC as income to qualify the borrower. Please defer to the specific Agency guidelines for the loan type you are using, as requirements may differ between loan type.




When can my borrower expect to receive their MCC?


After the file is approved, the MCC is typically issued and emailed to the borrower within 30 days, less if there are no erroneous or missing document for which IHDA must condition. Please ensure you provide a legitimate email address to for the borrower to avoid any delays.




How much does the MCC cost?


The MCC is $350.00 (check made payable to the Illinois Housing Development Authority). The lender may charge a separate $150.00 fee to the borrower for processing.




Do MCC documents require notarization?


All MCC documents may be electronically signed. IHDA documents that are electronically signed do not require notarization. If you choose to wet sign, please defer to the instructions on the document itself.




Do we need separate approval from IHDA to offer the MCC program?


No, any approved IHDA lender may offer the MCC to their eligible borrowers.




Is there any additional reporting or requirements for lenders originating an MCC?


Yes, for each calendar year during which the lender originated loans with an MCC tax credit, lenders must file an annual report with IRS form 8329. IHDA will send a year-end report to each lender that originated MCCs that contains information to help complete this form.





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