The SC Mortgage Tax Credit is a Mortgage Credit Certificate (“MCC”) program administered by the South Carolina State Housing Finance and Development Authority (SC Housing) that provides a federal income tax credit to qualified homebuyers of up to $2,000 per calendar year.
The MCC allows a homebuyer to convert a portion of their annual interest deduction on their primary residence into a Federal Tax Credit. This credit can be up to $2,000 per year for the life of the loan. The Homeowner can then subtract the credit taken from their annual interest and use the remaining balance as a regular interest deduction.
The credit can be taken annually when filing federal taxes, as a lump sum reducing your taxes owed, therefore getting a higher refund or you can increase your take-home pay by adjusting your federal tax deduction with your employer.
The credit can also be used as additional income on a mortgage application to allow a borrower to lower their debt ratio to help qualify for a loan or be able to qualify for a larger loan.
The cost of an SC Mortgage Tax Credit is just $500, with participating lenders also being able to charge up to a $500 processing fee. The cost of obtaining the credit may be paid by the borrower or by the seller of the home.
A SC Mortgage Tax Credit may be used with conventional (Fannie Mae/Freddie Mac) or government (FHA/VA/USDA) financing. MCC’s may not be used with SC Housing’s bond program, FHA 203(k) or USDA 502 direct loans.
For more information, click the program flyer below: