Zachary McCraw, Spanish Fort

School counselor and graduate student Zachary McCraw spent six years living in apartments after he moved to Spanish Fort for his job. In 2019, he decided that it was time to make the step to becoming a first-time homebuyer. 

McCraw credits lender Karen Campbell with FirstBank Mortgage in Fairhope with steering him to a Mortgage Credit Certificate (MCC), available through AHFA.

An MCC reduces the amount of federal income tax homebuyers must pay, which in turn frees up income to qualify for a mortgage. Borrowers can claim a tax credit up to 50 percent of the mortgage interest paid per yer, capped at $2,000 annually. It is a dollar-for-dollar reduction against a borrower's federal tax liability.

To receive immediate savings from the MCC, the borrower must file a revised W-4 withholding form with their employer, which should reduce the yearly tax contribution and increase the borrower's take-home pay. Borrowers can also choose to realize the savings once a year through the federal income tax return to be filed.

MCCs may be paired with AHFA's Step Up program or any other 30-year, fixed-rate, amortizing mortgage offered by a participating lender. 

AHFA's down payment assistance and mortgage tax credits make homeownership affordable across Alabama.