MCC Example

MCC Example: MCCs are issued directly to qualifying Applicants who are then able each year to take a tax credit equal to a specified percentage of the interest paid on their mortgage not to exceed $2,000. The Mortgage Credit Certificate rate is 40 percent. Thus, an Applicant with a $121,000.00 mortgage (30 year fixed with equal monthly installments of principal and interest) would realize the following savings:

MCC Example
Mortgage Amount:

$130,000.00

Annual Percentage Rate:

5.00%

Total Interest Paid First year:

$ 6,500.00

Mortgage Credit Certificate Rate:

X .40

Tax Credit Amount:

$2,600.00
$2,000 (max)

During the first year of the Program, this Applicant would be entitled to a tax credit of $2,000.00. Based upon such entitlement, he or she would be able to file in advance a revised W-4 withholding form taking into consideration this tax credit and have approximately $167.00 per month in additional disposable income. Additionally, taxpayers who file itemized returns may take a deduction for their mortgage interest paid each year, less an amount equal to the tax credit taken. (In the above example, the additional interest deduction would be $5,872.50 less $2,000.00, or $3,872.50)