Interested in becoming a participating lender?

The Department of Housing is now accepting applications from qualified lenders for participation in its Series 2022 TaxSmart Mortgage Credit Certificate program. If your lending institution would like to become a participating lender, please contact Destiny Durham via email at


TaxSmart is a Mortgage Credit Certificate (MCC) program administered by the Department of Housing that provides a federal income tax credit to qualified homebuyers.

An MCC is an official document issued by the City of Chicago, pursuant to federal law and regulation, for homebuyers who meet certain income criteria and home purchase price limits. Homebuyers must be purchasing their first home or buying a home in an economically troubled census tract known as a target area.

The MCC allows the homebuyer to claim a tax credit for a portion of the mortgage interest paid per year. The current rate of annual savings is 25 percent for a home purchase or 50 percent for home improvement or rehab loans. The annual savings is capped at $2,000. The TaxSmart MCC tax credit is a dollar for dollar reduction against federal tax liability, and it may be claimed each year the homebuyer continues to live in a home financed under this program.

Homebuyers must apply for the MCC when obtaining the mortgage loan. After closing, homebuyers cannot obtain an MCC.

Lenders must be either on the City's list of approved lenders, or a lender must submit an original TaxSmart Lender Participation Agreement to the Department of Housing for approval.

First-time homebuyers must receive HUD-approved in-person pre-purchase counseling to be eligible and must provide a certificate of completion of pre-purchase counseling with their TaxSmart application. Online counseling is not acceptable.

A charge of $100 will apply to replace or reissue a Series 2019 or Series 2016 MCC Certificate for any reason.

Once the home has been purchased, the homebuyer can refinance their mortgage and retain the MCC.


Federal law requires homebuyers to meet the following qualifications in order to receive a TaxSmart certificate.

First-Time Homebuyer or Target Area Purchase

Any person who has not owned a principal residence during the three years prior to closing a loan under this program is considered a first-time home buyer. Other homebuyers are also eligible if they purchase a home in a designated target area. Contact an Approved Participating Lender for target areas.


Federal law imposes maximum limits on the annual gross income of homebuyers.

Income Limits Non-Target Area Target Area

1- or 2-person household

$110,300 $132,360

3-or-more-person household



These limitations are periodically adjusted and do not apply to Mortgage Credit Certificates issued with respect to qualified home improvement loans.

Purchase Price

Federal law also imposes limits on the purchase price of homes financed under the program. These limitations are periodically adjusted and do not apply to mortgage credit certificates issued with respect to qualified home improvement loans

Non-Target Area Target Area
  Existing New construction Existing New construction
One Unit



$588,104 $588,104
Two Unit



$753,024 $753,024
Three Unit



$910,164 Ineligible
Four Unit



$1,131,156 Ineligible

These limitations are periodically adjusted and do not apply to Mortgage Credit Certificates issued with respect to qualified home improvement loans.

Principal Residence

The homebuyer must occupy the home as a principal residence within a reasonable period which, under most circumstances, may not exceed 60 days after the financing is provided. A principal residence is a home occupied primarily for residential purposes and does not include a home used as an investment property, as a recreational home or a home in which 15 percent or more of its total area is used for a trade or business.

One-to-Four-Family Home

Each residence financed must contain one to four units. A one-family residence includes a detached home, one unit of a duplex, a townhouse or a condominium unit. If the residence is a 2-to-4-unit building, one unit of the residence must be the principal residence of the building owner, and the residence must have been first occupied for residential purposes at least five years prior to applying for a mortgage loan financed in connection with the MCC.

New Mortgage

The mortgage loan financed in connection with an MCC is required to be a new mortgage and may not replace a prior mortgage on the home, regardless of whether that mortgage was repaid.

Program Area

In order to be eligible for an MCC, the home financed under the program must be located in the City of Chicago.

Service Facts

People We Serve:
Programs & Initiatives:

I Want To