Fannie Mae Selling Guide B3-3.4-10 — Mortgage Credit Certificates
Fannie Mae Selling Guide B3-3.4-10 — Mortgage Credit Certificates.
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Verbatim provisions from Fannie Mae Selling Guide B3-3.4-10 — Mortgage Credit Certificates — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.
Fannie Mae Selling Guide B3-3.4-10 — Mortgage Credit Certificates
B3-3.4-10, Mortgage Credit Certificates (03/04/2026) States and municipalities can issue mortgage credit certificates (MCCs) in place of, or as part of, their authority to issue mortgage revenue bonds. MCCs enable an eligible first-time homebuyer to obtain a mortgage secured by their principal residence and to claim a federal tax credit for a specified percentage (usually 20% to 25%) of the mortgage interest payments. Criteria Requirements Documentation For purchase transactions, the lender must obtain: • a copy of the MCC, and • the lender's documented calculation of the adjustment to the borrower's income. For refinance transactions, the lender must obtain: • confirmation prior to loan closing from the MCC provider that the MCC remains in effect for the new loan, and • copies of the MCC documents, including, the reissue certification. Note: Because the MCC is transaction specific, it does not have to comply with the Allowable Age of Credit Documents policy (see B1-1-03, Allowable Age of Credit Documents and Federal Income Tax Returns, for additional information). Income History No minimum history is required. Income Continuance Lenders are not required to verify continuance unless they have reason to believe the income may not continue. Determination of Qualifying Income When calculating the borrower’s DTI ratio, treat the maximum possible MCC income as an addition to the borrower’s income, rather than as a reduction to the amount of the borrower’s mortgage payment. Use the following calculation when determining the available income: [(Mortgage Amount) x (Note Rate) x (MCC %)] ÷ 12 = Amount added to borrower’s monthly income. For example, if a borrower obtains a $100,000 mortgage that has a note rate of 7.5% and they are eligible for a 20% credit under the MCC program, the amount that should be added to their monthly income would be $125 ($100,000 x 7.5% x 20% = $1500 ÷ 12 = $125).
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