How the Mortgage Credit Certificate Program Can Save an Average of $38,000 for Home Buyers in Denver’s Baker Neighborhood

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Colorado mortgage advisor Christian Durland reports that home buyers in the trendsetting and upwardly mobile Denver neighborhood of Baker have the ability to use a little-known tax credit tool to save an average of $38,000 over the life of a mortgage loan.

MCC program for Denver's Baker neighborhood

Denver's Baker neighborhood ripe for MCC program use

“(MCC) continues to function as one of the most financially savvy tools in the entire mortgage game. Couple it with a burgeoning area like Baker and the end result is not just a recipe for a future goldmine, but for cash in hand in the near future.

If having a shiny new luxury car thrown in with a home purchase in one of the hippest and most upwardly mobile Denver neighborhoods sounds appealing, perhaps it’s about time for potential Denver home buyers to focus their search on the Baker area. No, the government isn’t giving away Cadillac’s with homes these days, but it might as well be, what with the average of $38,000 in savings that Baker home buyers can net through the federal Mortgage Credit Certificate (MCC) tax credit program.

As Christian Durland, mortgage adviser operating out of Centennial, Colorado, reports: Baker is one of 30 Denver neighborhoods that has been tagged as an MCC “Targeted Area” by the IRS—meaning that its mortgagees are privy to all the tax benefits of a program that is, to the surprise of many, making the IRS sound nearly as charitable and friendly as Santa Claus. Says, Durland: “With the South Broadway Corridor’s multitude of incredible nightlife options and Baker’s proximity to downtown—not to mention an incredible array of local treasures in the form of independent shops that make it one of the city’s best areas for a stroll—it’s startling that the MCC program is still being used to incentivize such a vibrant area.”

But what exactly does this program entail and why is it saving area home buyers an average of $38,000 on the life of a Baker home loan? That’s where the fascinating particulars of the MCC kick in. Once the MCC has been obtained by a borrower, it functions as a way for the borrower to be refunded 20 percent of the annual sum they pay in mortgage interest to their lender by the IRS.

So, for example, if one were to buy a Baker home at $235,000—analytics company Trulia’s median sales price for the area as of a recent report—and a 4 percent interest rate was acquired, 20 percent of all those yearly payments would go back to the borrower via their MCC. Given the scenario posited here, that comes out to about $1,940 a year, or more than $38,000 over the course of a 20-year mortgage loan. And what’s more, the remaining 80 percent of the annual mortgage interest payments would still remain tax deductible.

And while many look at the MCC program as designed exclusively for low-income buyers in low-income neighborhoods, such ideas are in fact a fallacy. This can be witnessed in the fact that a neighborhood like Baker still qualifies for the program, and it can also be seen in some of the MCC program’s financially lenient measures. For borrowers, these include an income of up to $95,100 for one- to two-person households or $111,000 for three-plus person households (both well above the median household income for the Denver area). The only other major stipulation outside this involves home buyers being limited to owning one home, which usually isn’t much of an issue for those beginning a family or furthering their professional career in an area that caters as well to both those pursuits as Baker.

As Durland notes of the MCC program: “This well-kept secret continues to function as one of the most financially savvy tools in the entire mortgage game. Couple it with a burgeoning area like Baker and the end result is not just a recipe for a future goldmine, but for cash in hand in the near future.”

About Christian Durland:
As a well-established mortgage advisor with extensive knowledge of the intricacies of Colorado mortgage planning, Christian Durland’s decade-plus of experience in his field has also allowed him to develop an elaborate network of Denver-area real estate professionals whom he can refer clients to, based on specific mortgaging needs. Operating outside of the conventions of simple real estate transactions, Durland prides himself on his ability to guide borrowers through every step of the home buying process in order to help maximize their savings. It’s his success in these endeavors that has won him a reputation for being a trusted figure and foremost authority in the Colorado real estate community. Durland is also a multi-time recipient of the locally coveted 5280 Denver’s Magazine’s “Top Mortgage Professionals Award”, which is awarded to Denver’s most elite mortgage bankers and brokers annually.

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Kyle Fitzsimmons
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