Texas Mortgage Credit Certificate (MCC)

The Texas Mortgage Credit Certificate (MCC) is a tax credit that helps new homeowners offset the cost of buying a home. With a Mortgage Credit Certificate, you are eligible to receive a federal tax credit for up to 20% of the total interest you pay on your mortgage loan each year. 

Because an MCC refunds a significant portion of your mortgage interest, it effectively lowers your interest rate and reduces your long-term housing expenses. Additionally, the Mortgage Credit Certificate can be combined with many Texas down payment assistance programs to reduce your upfront and ongoing mortgage expenses.

MCCs are available everywhere in the country, but the amount of tax credit varies state-by-state. To qualify for a mortgage credit certificate in Texas, you must apply through a participating MCC lender.

Eligibility requirements

To qualify for a Texas Mortgage Credit Certificate, you must meet the following five eligibility requirements. 

1. The property must be in Texas.
2. The home must be used as your primary residence.
3. You must qualify as a new homeowner, meaning you haven’t owned a home in the past three years.
4. Your income must be below the program’s threshold. This threshold varies depending on location and the number of people in your household, but it currently falls between $90,100 and $148,960.*
5. You must apply before you close on your home.

*For all DPA programs, income and purchase price limits are regularly reviewed and updated. These amounts were correct at the time of publication but may change with time.

Type of assistance

The Texas Mortgage Credit Certificate is a federal tax credit administered by the state’s Housing Finance Agency. You receive this credit when you file your federal income taxes, and you can receive it every year during the life of the loan, provided you maintain the home as your primary residence. 

Amount of down payment assistance

The Texas Mortgage Credit Certificate reduces your federal tax burden by 20%** of the total interest you paid on your mortgage during the previous year, up to an annual maximum of $2,000.

The tax credit you receive as part of the MCC cannot be greater than your total annual federal income tax liability. 

**Texas Department of Housing and Community Affairs reviews these rates annually. Please check with your lender to verify the most current rate. 

Minimum borrower contribution

To receive an MCC in Texas, you must pay an issuance fee of $400 when the loan closes. The fee is treated as a closing cost, so it can be added to your total loan amount or paid up front at the time of closing. 

With an MCC, most homeowners save tens of thousands of dollars over the life of their mortgage loan, so the issuance fee is minimal considering how much the tax credit saves you over the long term. 

Purchase price limits

There are no purchase price limits associated with the Texas Mortgage Credit Certificate. 

Income limits

To qualify for the Texas Mortgage Credit Certificate, your income must fall below a certain threshold, which varies depending on the size of your household and the location of your prospective home.  

This maximum income threshold for the MCC is currently between $90,100 and $148,960, although income limits are consistently assessed and adjusted. 

You can easily check your income eligibility using our free down payment assistance finder.

How to qualify for the Texas Mortgage Credit Certificate

To be eligible for a Mortgage Credit Certificate, you must satisfy the eligibility criteria outlined above. Our free down payment assistance finder can help you determine if you qualify.

How to apply for the Texas Mortgage Credit Certificate

You must apply for the Texas Mortgage Credit Certificate through an MCC-approved lender. Use our free down payment assistance finder to connect with an approved lender who can help you with the application process.