Can A VHDA MCC Help You Buy Your First Home


Jimmy Sgambelluri

Sr. Mortgage Banker

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Article written by:  Jimmy Sgambelluri
November 13, 2017

This question is becoming more and more common in the Virginia real estate space.

Since the certificate program started in May of 2015, VHDA has seen an increase in the demand for Mortgage Credit Certificate*.

This is a credit that will be applied to a customers federal income tax liability every single year that they own the home. The credit is equal to 20% of mortgage interest paid during each calendar year.

The video below will give you an example of how you will benefit from a VHDA MCC.

For more information on the VHDA MCC contact Jimmy Sgambelluri, a VHDA loan officer at 757-287-4098 Call or Text

The borrower will need to have a federal tax liability in order to use the credit. Any unused portion can be carried over for up to 3 years.

To qualify for the VHDA MCC you must have not had an ownership interest in a home for a period of at least 3 years, must use the MCC in the purchase only of a primary residence.

The MCC is not available in a refinance transaction. If a loan with an MCC is refinances the MCC will not be re-issued.

The Mortgage Credit Certificate is not limited to FHA loans, VA loans, or conventional loans. Nor does it have to be a loan through the VHDA. They will issue the certificate even if they are not he lender.  This a unique characteristic of this specific VHDA home loan.

The Virginia Housing Development Administration has some standard limitations for their loan products and the MCC is no exception. Listed below are some things that you will need to be aware of when looking at a mortgage credit certificate as an option.

  • There are income limitations with the VHDA MCC and this will include all borrowers on the the loan and any other person taking title to the home.
  • The sales price limitation would be equal to the greater of the sales price, loan amount, or acquisition cost.
  • Must be owner occupied, single family residence. Can not be used for investment property.
  • 2 acre limit unless waiver granted.
  • Manufactured homes must be permanently attached to real estate.

Refer to the VHDA Income, Sales Price, & Loan Limit charts here.

There will be an administration fee assessed by VHDA in the amount of $750. This will be waived if the MCC is issued in conjunction with a VHDA loan.

Not everyone will benefit from an MCC. You must have a tax liability to benefit from an MCC. The credit claimed cannot exceed your annual tax liability after all other credits and deductions. Unused credits may be carried forward for three years. Please consult with your tax advisor to see if an MCC is right for you.

Virginia Housing determines whether homebuyers qualify for MCCs under the Internal Revenue Code, but homebuyers must determine for themselves whether an MCC will save them money and how valuable an MCC will be for them over the life of their loan. 

- Certain restrictions apply.  Not available in all areas.  Please contact your Homespire Mortgage Company loan officer for more details.

- Virginia Housing or Homespire Mortgage Company cannot and does not give any tax advice to anyone. Consult with your tax advisor.

About the Author

Hi, I am Jimmy Sgambelluri, a mortgage loan officer with an undeniable commitment to providing simplicity and clarity to the mortgage process.

You will find that I truly enjoy helping consumers and real estate agents navigate the mortgage maze.

As a Virginia based mortgage professional with over 20 years lending experience, I can help simplify the mortgage process for your family.

When you need somebody with integrity, deep expertise, & resources in the mortgage industry you have found the right person.

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