Mortgage Credit Certificate

Aug 18, 2011 1 Replies

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paultry 14 years ago

Taxpayer obtained a Mortgage Credit Certificate (20%) through a state-sponsored first time home buyer program in

2007. Taxpayer wants to refinance for a lower interest rate, but doing so will terminate the MCC

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and the state can't/won't reissue an MCC for the new loan. If Taxpayer can convince the mortgage holder to reduce the interest rate on the existing loan (no new money, no other change in terms, same loan/account number), will the originally issued MCC remain in effect?

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Alan 14 years ago

I have no experience with this. However, having read the code section (IRC Sec. 25) and the temporary regulations issued by the Treasury, I see nothing that would preclude using the certificate to obtain the credit merely because the interest rate is changed by the lender. As long as the original loan still exists and there is no change to the certified amount of indebtedness, the taxpayer should remain eligible for the credit.

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