B3-3.4-10, Mortgage Credit Certificates (03/04/2026)

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 ReturnsB1-1-03, Allowable Age of Credit Documents and Federal Income Tax Returns, for additional information).

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).