Mortgage Interest Tax Credit Information

Programs that provide information and guidance for eligible individuals who need assistance in determining whether they qualify for the mortgage interest tax credit for first-time home buyers whose income is below the median income for the area in which they live. To be eligible for the credit, homeowners must obtain a mortgage credit certificate (MCC) from their local or state government office. Certificates are issued only in connection with new mortgages for the purchase on an individual"™s primary residence and must be requested prior to finalizing the mortgage to purchase the home. The MCC shows the certificate credit rate that can be used to figure the tax credit as well as the certified indebtedness amount on which the interest is eligible for the credit. To claim the credit, homeowners complete Form 8396, Mortgage Interest Credit, and attach it to their Form 1040. Mortgage interest deductions must be reduced by the amount of the credit.