The Colorado Housing and Finance Authority has rolled out a new program that reduces a homeowner’s federal tax.

First-time homebuyers may use the Mortgage Credit Certificate program if they finance with a long-term fixed-rate mortgage. And homeowners who purchased a home that was financed with an adjustable-rate mortgage between Dec. 31, 2001 and Jan. 1, 2008, may refinance into a long-term fixed rate mortgage with the program.

The program’s goal is to free up income for mortgage payments.

With a Mortgage Credit Certificate, homeowners may claim 20 percent of mortgage interest paid each tax year as a dollar-for-dollar deduction from federal taxes.

The remaining 80 percent of interest paid may be calculated as an itemized deduction. But homeowners who do not itemize their deductions may still claim the 20 percent.

As long as the homeowner occupies and owns the home as his or her primary residence, these tax benefits continue annually.

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Participating homeowners must have a credit score of 580 or more.

The savings are based on interest paid. For example, a $150,000 loan, at 6 percent, has a total annual interest amount of $9,000. The MCC credit deduction on 20 percent of that is $1,800, which is a monthly tax credit of $150.

Numerous lenders from El Paso and Teller counties are undergoing training today, July 8, to be able to offer the program, said Jerilynn Martinez, CHFA’s legislative and media liaison.

From a lender’s perspective, the program is unique because a lender may choose to offer the
MCC program, without being obligated to offer other CHFA programs.

“One of the best benefits of Mortgage Credit Certificates is that they continue to provide benefit to a family for as long as they live in that house,” said Karen Harkin, CHFA’s director of home finance.

“The certificates truly are the gift that keeps on giving,” she added.

For more information, to see income and home purchase price limits, and for a list of current participating lenders in El Paso and Teller counties, visit or call (800) 877-2432.


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