Portland Mortgage Credit Certificate (MCC) Better than Buyer Tax Credit?

IRS LogoThe Portland Housing Bureau runs a program called the Mortgage Credit Certificate which “is a IRS-approved tax credit, which reduces their federal income taxes owed as long as they keep the loan and continuously occupy the home as their principal residence.”

Disclaimer: this post is not tax advice, consult a tax professional and  MMC approved lender if you have questions about your own qualifications.  Interestingly, there is training for approved lenders but no Realtor training for the program.

The example given on the Mortgage Credit Certificate fact page saves the taxpayer $3000 a year by claiming 20% of the mortgage interest paid annually.  Not everyone or every property qualifies and there is a $675 fee at closing and the borrow must take a class through the Portland Housing Center:


Eligible Homebuyer

  • First-time homebuyer, which is defined as not having owned a home in the past three years; this rule is waived if the property is located in a “MCC Target Area” (PDF)
  • Annual borrower and co-borrower income limits are as follows:
    1-2 Persons-$71,200
    3 or more persons-$81,880
  • Must meet first mortgage lender’s criteria for underwriting, credit and down payment requirements with an approved MCC lender
  • Must occupy property as “principal residence” within 60 days of the purchasing the home
  • Must complete a HUD-Certified homebuyer education course prior to loan closing

Eligible Property

  • Must be located within the Portland city limits (verify eligibility on www.PortlandMaps.com)
  • Must remain owner-occupied to be eligible to continue taking the credit
  • Single-family units only, including condos and town homes
  • Maximum purchase price – $454,909 city-wide


The MCC Lender page states that: “As a key part of delivering the program,  the participating lenders have agreed to aggressively market the program to people of color and help PHB address the minority homeownership gap.”  The Oregonian profiled a couple that used the program in Sunday’s paper.

Also beware that there is a recapture system for paying money back under certain circumstance and part of the documentation is the Notice of Method to Compute Recapture:

If the buyer sells or otherwise disposes of the home with which the buyer received an MCC during the nine years after purchase, all or part of this benefit may be “recaptured.” The recapture is accomplished by an increase in the homeowner’s federal income tax for the year in which the home is sold. The recapture only applies, however, if the home is sold at a gain
and if the homeowner’s income has increased above specified levels.

The Oregonian article does not mention recapture.  In the article Jon C. Gail underscores the program is aimed a bringing diversity to homeownership:

Since it began in 2008, the program has approved MCCs for 158 homebuyers and has funding available for 123 more, said Jon C. Gail, the bureau’s senior community outreach and info representative. Once those funds are gone, he expects the bureau to apply for more.

About 82 percent of the buyers so far have been young, single borrowers. While the program aims to help anyone who aspires to homeownership, a goal is to encourage more minorities to buy homes, said Gail. There’s a wide gap in homeownership in Portland, he noted. While 60 percent of whites live in owner-occupied homes, the percentage drops to 33.2 percent for African-Americans and 38.7 percent for Hispanics. The program’s target is to award 35 percent of the MCCs to homebuyers of color.

So, like all things housing, do your homework and see if this is something that can help you in your situation.

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