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Homebuyers

Increased Income Limits & Sales Price Limits for MCC Program

April 26, 2021

With increased income limits and sales prices limits now in effect, more Alabamians than ever will qualify for AHFA's Mortgage Credit Certificate program.

Effective April 15, the maximum sales price in target areas will be $381,308 and $311,980 in non-target areas.

The new income limits, also effective April 15, were released by the U.S. Department of Housing and Urban Development and are based upon the state's median income. Homebuyers can earn up to $100,050 in urban areas and $93,380 in rural areas, depending on family size and location.

The new higher sales price and income limits benefit participants in the MCC program, which provides a tax credit to reduce the amount of federal taxes owed by a percentage of the annual mortgage interest paid each year. The remaining annual interest may be claimed as a mortgage interest deduction on the homebuyer's federal tax return.

Qualified homebuyers will receive a larger federal tax break or tax refund each year or benefit from immediate savings by updating the withholdings on their W-4 form.

MCCs may be paired with AHFA's Step Up program or any conventional fixed-rate, FHA, VA, Rural Development, and privately insured mortgages.