Current program status: The Maryland HomeCredit Program, which issued Mortgage Credit Certificates, is closed to new reservations. The Maryland Mortgage Program states that it does not plan to reopen the program in the immediate future.
Existing homeowners who already hold a valid Maryland Mortgage Credit Certificate may still be able to have the certificate reissued when refinancing through an approved MCC lender.
What Is a Mortgage Credit Certificate?
A Mortgage Credit Certificate, commonly called an MCC, allows an eligible homeowner to claim a federal income-tax credit based on a portion of the mortgage interest paid on a qualifying primary residence.
Maryland’s program was called Maryland HomeCredit. Under the program, the potential annual credit equaled 25% of qualifying mortgage interest paid, subject to a maximum credit of $2,000 per year.
An MCC is not a down payment grant and does not reduce the mortgage balance. It is a potential federal tax credit that may reduce the homeowner’s federal income-tax liability when all requirements are met.
Can a New Maryland Homebuyer Get an MCC Today?
No. Maryland HomeCredit is currently closed to new reservations. A buyer cannot obtain a new Maryland MCC with a current purchase transaction unless the State formally reopens the program.
Because old articles and marketing materials may still describe the previous benefits, buyers should not include an MCC tax credit in an affordability calculation or expect to receive one at closing.
What If You Already Have a Maryland MCC?
An existing certificate may be eligible for reissuance after the related mortgage is refinanced. The homeowner must work with an approved MCC lender and follow the Maryland HomeCredit reissuance requirements.
Do not assume that the original certificate automatically transfers to the new mortgage. Ask about the reissuance process before completing a refinance so the required documentation and timing can be reviewed.
Can You Claim the Credit After Selling or Moving Out?
MCC benefits were tied to a qualifying mortgage and the homeowner’s use of the property as a primary residence. Selling the home, paying off the mortgage or converting the property to another use can affect eligibility.
Tax rules depend on the homeowner’s circumstances. Homeowners should consult a qualified tax professional regarding the amount and availability of any credit and the correct tax reporting.
What Assistance Is Available Instead?
Although new Maryland MCC reservations are unavailable, eligible buyers may still qualify for other Maryland Mortgage Program options, including 30-year fixed-rate first mortgages and down payment assistance loans.
Available programs, interest rates and assistance amounts can change. A buyer should compare the entire loan structure, including the mortgage payment, cash required, repayment terms of any second mortgage and long-term cost.
What About MCC Programs in Washington, D.C. and Virginia?
MCC availability is different across the region. The District of Columbia Housing Finance Agency currently states that its Mortgage Credit Certificate program is closed and not accepting applications. Buyers should not rely on a D.C. MCC unless DCHFA formally reopens the program.
Virginia Housing’s MCC program has been suspended since May 1, 2023. Loans locked after April 28, 2023 are not eligible for a new Virginia MCC. Homeowners who received a Virginia MCC before the suspension may generally continue using it while the original mortgage remains outstanding and the home remains their primary residence.
Because MCC availability and lender participation can change, buyers should confirm current program status before relying on a potential tax credit when planning a purchase.
Buying or Refinancing in Maryland?
The Chris Jordan Mortgage Team can help you review current Maryland financing and down payment assistance options. If you already have a Maryland Mortgage Credit Certificate and are considering a refinance, we can also help identify the questions you should address before proceeding.
Questions about Maryland homebuyer programs or an existing MCC?
Call us at (240) 670-5090 or email us at CJMT@mainstreethl.com.
Tax laws and mortgage programs are subject to change. This article is for general information and is not tax advice. Consult a qualified tax professional regarding your individual situation.
