What is a Mortgage Credit Certificate?

A  Kentucky Houising (KHC)( Mortgage Credit Certificates (MCC) reduces the amount of federal income tax you pay, giving you more available income to qualify for a mortgage loan.  MCCs are NOT mortgages.  They are tax credits that put extra cash in your pocket each month, so you can more easily afford a house payment.  That means fewer tax dollars will be withheld from your regular paycheck, increasing your take-home pay.  The federal government allows every homeowner an income tax deduction for all the interest paid each year on a mortgage loan.  But an MCC gives you a tax credit of 25 percent (not to exceed $2,000).  You can still deduct the remaining 75 percent interest on your income taxes.  A tax credit is not the same as a tax deduction.  A tax deduction reduces the portion of your income that is taxed, so you pay less.  A tax credit is a direct, dollar for dollar reduction in the total tax you owe.  The MCC is effective for the life of the loan as long as you live in the home.  If you sell your home in the first nine years of ownership, you may be subject to Federal Recapture Tax.

MCC Brochure 

Eligibility to apply

You may qualify for the program if:

• You are purchasing your first home.
• You have not owned a home in the last three years.
• The home you wish to buy is located in an area of the state which is exempt from the first-time home buyer rule.  (Your local lender can determine those “targeted areas.”)

Maximum home sales price is $258,000.

Maximum income limits:

     1-2 person household : $52,800-$83,040

     3-4 person household : $60,720-$96,880

You must meet Kentucky Lender , KHC, FHA, VA, RHS, Fannie Mae, and/or Freddie Mac standards for creditworthiness.  You must occupy the property.

It cannot be used for business, commercial, or rental purposes. 

Applicants need a sales contract with a legal description of the property, a $500 MCC fee, and copies of federal income tax returns for the past three years.

How to Apply?

Applications are accepted on a first-come, first-served basis by a Kentukcy statewide network of local lenders.  MCCs are available with Kentucky FHA, VA, RHS, Fannie Mae, and Freddie Mac Conventional 30-year mortgages at a fixed-rate.  MCCs cannot be used with KHC’s Mortgage Revenue Bond program, but may be used with KHC’s Fannie Mae Cash Window program.  Your local lender will submit your loan application and notify you as to whether your application has been accepted. 

With an MCC from KHC, you will get direct dollar-for-dollar reduction in your federal taxes worth 25 percent of the interest you pay on your mortgage each year.  You can still claim the remaining 75 percent of the interest as a tax deduction.

MCC Credit Certificate is offered in the following areas in Kentucky:

Kentucky MCC Credit Certificate Mortgage Limits by County

MSA Name County Name One-Family Two-Family Three-Family Four-Family
NON-METRO ADAIR $271,050 $347,000 $419,425 $521,250
NON-METRO ALLEN $271,050 $347,000 $419,425 $521,250
FRANKFORT, KY (MICRO) ANDERSON $271,050 $347,000 $419,425 $521,250
PADUCAH, KY-IL (MICRO) BALLARD $271,050 $347,000 $419,425 $521,250
GLASGOW, KY (MICRO) BARREN $271,050 $347,000 $419,425 $521,250
MOUNT STERLING, KY (MICRO) BATH $271,050 $347,000 $419,425 $521,250
MIDDLESBOROUGH, KY (MICRO) BELL $271,050 $347,000 $419,425 $521,250
CINCINNATI-MIDDLETOWN, OH-KY-IN (MSA) BOONE $271,050 $347,000 $419,425 $521,250
LEXINGTON-FAYETTE, KY (MSA) BOURBON $271,050 $347,000 $419,425 $521,250
HUNTINGTON-ASHLAND, WV-KY-OH (MSA) BOYD $271,050 $347,000 $419,425 $521,250
DANVILLE, KY (MICRO) BOYLE $271,050 $347,000 $419,425 $521,250
CINCINNATI-MIDDLETOWN, OH-KY-IN (MSA) BRACKEN $271,050 $347,000 $419,425 $521,250
NON-METRO BREATHITT $271,050 $347,000 $419,425 $521,250
NON-METRO BRECKINRIDGE $271,050 $347,000 $419,425 $521,250
LOUISVILLE-JEFFERON COUNTY, KY-IN (MSA) BULLITT $271,050 $347,000 $419,425 $521,250
NON-METRO BUTLER $271,050 $347,000 $419,425 $521,250
NON-METRO CALDWELL $271,050 $347,000 $419,425 $521,250
MURRAY, KY (MICRO) CALLOWAY $271,050 $347,000 $419,425 $521,250
CINCINNATI-MIDDLETOWN, OH-KY-IN (MSA) CAMPBELL $271,050 $347,000 $419,425 $521,250
NON-METRO CARLISLE $271,050 $347,000 $419,425 $521,250
NON-METRO CARROLL $271,050 $347,000 $419,425 $521,250
NON-METRO CARTER $271,050 $347,000 $419,425 $521,250
NON-METRO CASEY $271,050 $347,000 $419,425 $521,250
CLARKSVILLE, TN-KY (MSA) CHRISTIAN $271,050 $347,000 $419,425 $521,250
LEXINGTON-FAYETTE, KY (MSA) CLARK $271,050 $347,000 $419,425 $521,250
NON-METRO CLAY $271,050 $347,000 $419,425 $521,250
NON-METRO CLINTON $271,050 $347,000 $419,425 $521,250
NON-METRO CRITTENDEN $271,050 $347,000 $419,425 $521,250
NON-METRO CUMBERLAND $271,050 $347,000 $419,425 $521,250
OWENSBORO, KY (MSA) DAVIESS $271,050 $347,000 $419,425 $521,250
BOWLING GREEN, KY (MSA) EDMONSON $271,050 $347,000 $419,425 $521,250
NON-METRO ELLIOTT $271,050 $347,000 $419,425 $521,250
NON-METRO ESTILL $271,050 $347,000 $419,425 $521,250
LEXINGTON-FAYETTE, KY (MSA) FAYETTE $271,050 $347,000 $419,425 $521,250
NON-METRO FLEMING $271,050 $347,000 $419,425 $521,250
NON-METRO FLOYD $271,050 $347,000 $419,425 $521,250
FRANKFORT, KY (MICRO) FRANKLIN $271,050 $347,000 $419,425 $521,250
UNION CITY, TN-KY (MICRO) FULTON $271,050 $347,000 $419,425 $521,250
CINCINNATI-MIDDLETOWN, OH-KY-IN (MSA) GALLATIN $271,050 $347,000 $419,425 $521,250
NON-METRO GARRARD $271,050 $347,000 $419,425 $521,250
CINCINNATI-MIDDLETOWN, OH-KY-IN (MSA) GRANT $271,050 $347,000 $419,425 $521,250
MAYFIELD, KY (MICRO) GRAVES $271,050 $347,000 $419,425 $521,250
NON-METRO GRAYSON $271,050 $347,000 $419,425 $521,250
NON-METRO GREEN $271,050 $347,000 $419,425 $521,250
HUNTINGTON-ASHLAND, WV-KY-OH (MSA) GREENUP $271,050 $347,000 $419,425 $521,250
OWENSBORO, KY (MSA) HANCOCK $271,050 $347,000 $419,425 $521,250
ELIZABETHTOWN, KY (MSA) HARDIN $271,050 $347,000 $419,425 $521,250
NON-METRO HARLAN $271,050 $347,000 $419,425 $521,250
NON-METRO HARRISON $271,050 $347,000 $419,425 $521,250
NON-METRO HART $271,050 $347,000 $419,425 $521,250
EVANSVILLE, IN-KY (MSA) HENDERSON $271,050 $347,000 $419,425 $521,250
LOUISVILLE-JEFFERON COUNTY, KY-IN (MSA) HENRY $271,050 $347,000 $419,425 $521,250
NON-METRO HICKMAN $271,050 $347,000 $419,425 $521,250
MADISONVILLE, KY (MICRO) HOPKINS $271,050 $347,000 $419,425 $521,250
NON-METRO JACKSON $271,050 $347,000 $419,425 $521,250
LOUISVILLE-JEFFERON COUNTY, KY-IN (MSA) JEFFERSON $271,050 $347,000 $419,425 $521,250
LEXINGTON-FAYETTE, KY (MSA) JESSAMINE $271,050 $347,000 $419,425 $521,250
NON-METRO JOHNSON $271,050 $347,000 $419,425 $521,250
CINCINNATI-MIDDLETOWN, OH-KY-IN (MSA) KENTON $271,050 $347,000 $419,425 $521,250
NON-METRO KNOTT $271,050 $347,000 $419,425 $521,250
NON-METRO KNOX $271,050 $347,000 $419,425 $521,250
ELIZABETHTOWN, KY (MSA) LARUE $271,050 $347,000 $419,425 $521,250
LONDON, KY (MICRO) LAUREL $271,050 $347,000 $419,425 $521,250
NON-METRO LAWRENCE $271,050 $347,000 $419,425 $521,250
NON-METRO LEE $271,050 $347,000 $419,425 $521,250
NON-METRO LESLIE $271,050 $347,000 $419,425 $521,250
NON-METRO LETCHER $271,050 $347,000 $419,425 $521,250
MAYSVILLE, KY (MICRO) LEWIS $271,050 $347,000 $419,425 $521,250
DANVILLE, KY (MICRO) LINCOLN $271,050 $347,000 $419,425 $521,250
PADUCAH, KY-IL (MICRO) LIVINGSTON $271,050 $347,000 $419,425 $521,250
NON-METRO LOGAN $271,050 $347,000 $419,425 $521,250
NON-METRO LYON $271,050 $347,000 $419,425 $521,250
RICHMOND-BEREA, KY (MICRO) MADISON $271,050 $347,000 $419,425 $521,250
NON-METRO MAGOFFIN $271,050 $347,000 $419,425 $521,250
NON-METRO MARION $271,050 $347,000 $419,425 $521,250
NON-METRO MARSHALL $271,050 $347,000 $419,425 $521,250
NON-METRO MARTIN $271,050 $347,000 $419,425 $521,250
MAYSVILLE, KY (MICRO) MASON $271,050 $347,000 $419,425 $521,250
PADUCAH, KY-IL (MICRO) MCCRACKEN $271,050 $347,000 $419,425 $521,250
NON-METRO MCCREARY $271,050 $347,000 $419,425 $521,250
OWENSBORO, KY (MSA) MCLEAN $271,050 $347,000 $419,425 $521,250
LOUISVILLE-JEFFERON COUNTY, KY-IN (MSA) MEADE $271,050 $347,000 $419,425 $521,250
MOUNT STERLING, KY (MICRO) MENIFEE $271,050 $347,000 $419,425 $521,250
NON-METRO MERCER $271,050 $347,000 $419,425 $521,250
GLASGOW, KY (MICRO) METCALFE $271,050 $347,000 $419,425 $521,250
NON-METRO MONROE $271,050 $347,000 $419,425 $521,250
MOUNT STERLING, KY (MICRO) MONTGOMERY $271,050 $347,000 $419,425 $521,250
NON-METRO MORGAN $271,050 $347,000 $419,425 $521,250
CENTRAL CITY, KY (MICRO) MUHLENBERG $271,050 $347,000 $419,425 $521,250
LOUISVILLE-JEFFERON COUNTY, KY-IN (MSA) NELSON $271,050 $347,000 $419,425 $521,250
NON-METRO NICHOLAS $271,050 $347,000 $419,425 $521,250
NON-METRO OHIO $271,050 $347,000 $419,425 $521,250
LOUISVILLE-JEFFERON COUNTY, KY-IN (MSA) OLDHAM $271,050 $347,000 $419,425 $521,250
NON-METRO OWEN $271,050 $347,000 $419,425 $521,250
NON-METRO OWSLEY $271,050 $347,000 $419,425 $521,250
CINCINNATI-MIDDLETOWN, OH-KY-IN (MSA) PENDLETON $271,050 $347,000 $419,425 $521,250
NON-METRO PERRY $271,050 $347,000 $419,425 $521,250
NON-METRO PIKE $271,050 $347,000 $419,425 $521,250
NON-METRO POWELL $271,050 $347,000 $419,425 $521,250
SOMERSET, KY (MICRO) PULASKI $271,050 $347,000 $419,425 $521,250
NON-METRO ROBERTSON $271,050 $347,000 $419,425 $521,250
RICHMOND-BEREA, KY (MICRO) ROCKCASTLE $271,050 $347,000 $419,425 $521,250
NON-METRO ROWAN $271,050 $347,000 $419,425 $521,250
NON-METRO RUSSELL $271,050 $347,000 $419,425 $521,250
LEXINGTON-FAYETTE, KY (MSA) SCOTT $271,050 $347,000 $419,425 $521,250
LOUISVILLE-JEFFERON COUNTY, KY-IN (MSA) SHELBY $271,050 $347,000 $419,425 $521,250
NON-METRO SIMPSON $271,050 $347,000 $419,425 $521,250
LOUISVILLE-JEFFERON COUNTY, KY-IN (MSA) SPENCER $271,050 $347,000 $419,425 $521,250
CAMPBELLSVILLE, KY (MICRO) TAYLOR $271,050 $347,000 $419,425 $521,250
NON-METRO TODD $271,050 $347,000 $419,425 $521,250
CLARKSVILLE, TN-KY (MSA) TRIGG $271,050 $347,000 $419,425 $521,250
LOUISVILLE-JEFFERON COUNTY, KY-IN (MSA) TRIMBLE $271,050 $347,000 $419,425 $521,250
NON-METRO UNION $271,050 $347,000 $419,425 $521,250
BOWLING GREEN, KY (MSA) WARREN $271,050 $347,000 $419,425 $521,250
NON-METRO WASHINGTON $271,050 $347,000 $419,425 $521,250
NON-METRO WAYNE $271,050 $347,000 $419,425 $521,250
EVANSVILLE, IN-KY (MSA) WEBSTER $271,050 $347,000 $419,425 $521,250
CORBIN, KY (MICRO) WHITLEY $271,050 $347,000 $419,425 $521,250
NON-METRO WOLFE $271,050 $347,000 $419,425 $521,250
LEXINGTON-FAYETTE, KY (MSA) WOODFORD $271,050 $347,000 $419,425 $521,250