North Carolina’s Mortgage Credit Certificate and Down Payment Assistance Programs – Who Qualifies?

The North Carolina Housing Finance Agency has two great programs for First Time Home Buyers.These programs are the Mortgage Credit Certificate and the Down Payment Assistance Program.

If you qualify for one of these programs and you purchase a home between January 1, 2009 and December 1, 2009, you can ALSO qualify for the $8,000 tax credit just enacted into law in the Federal Economic Stimulus Plan.See my related blog post on the tax credit.

First, who is a First Time Home Buyer?A First Time Home Buyer is someone who has not owned a home in the past three years.This is the same qualifying definition for the $8,000 tax credit.

What is a Mortgage Credit Certificate and Who Qualifies?

A Mortgage Credit Certificate (MCC) is a federal tax credit to assist home buyers with moderate and low incomes.All home owners can claim an itemized deduction for mortgage interest.The MCC takes this a step further. An MCC “reduces your tax liability based on a percentage of the mortgage interest that you pay.

If you qualify for the MCC, you can claim 20% of the interest you pay on your mortgage as a credit on your federal income taxes.You can save up to $2,000 on your taxes.

If you do qualify for the MCC, for 2009, you will be able to combine this with the $8,000 tax credit.This would reduce a buyer’s tax liability by $10,000.

Who Qualifies for an MCC?

Who qualifies for an MCC is based on your income and the price of the home you are purchasing.Household income is defined as the “gross income of the mortgagor and any other person expected to live in the residence who is 18 years of age or older.”

The income and house price limits that apply in Orange, Durham and Chatham Counties are listed below.

MCC Income Limits

1 Person


2 Persons


3 Persons


4 Persons


MCC Sales Price Limits

New Home


Existing Home