Program Highlights: The federal government allows each homeowner to claim an itemized income tax deduction for the amount of interest paid each year on a mortgage loan. The Mortgage Credit Certificate enhances this benefit. Homeowners with a MCC are allowed to use 20% of their annual mortgage interest as direct federal tax credit, resulting in a dollar for dollar reduction of their annual federal income tax liability. The remaining 80% of their annual mortgage interest will continue to qualify as an itemized tax deduction.
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Tax credit can be used with IHDA MCCs. According to the Illinois Housing Development Authority, the $8,000 tax credit can be used in tandem with IHDA’s Mortgage Credit Certificate (MCC) programs, which recently received $99 million in funding.
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