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Mortgage Credit Certificate Program

couples and families

IMAGINE lowering your taxes by up to $2,000 a year!


We’re helping to make buying a home more affordable with LOW interest rates, FEWER fees, LOW or NO down payment--and up to $2,000 in TAX SAVINGS each year.

First Columbia Bank is a select local lender that partners with the PHFA (Pennsylvania Housing Finance Agency) to offer this tax-advantaged mortgage program to homebuyers in our area.

Through the Mortgage Credit Certificate Program, a homeowner is able to claim a tax credit of up to 50% of the mortgage interest paid per year, capped at $2,000 annually. This means a homeowner’s tax bill can be reduced up to $2,000 each year–over the life of your loan!

How Much Credit can be Claimed?

The amount of the annual tax credit ranges from 20 to 50 percent of the annual interest a homeowner pay on their mortgage loan and based on the original loan amount as follows:

Loan Amount Credit Rate
Up to $100,000 50%
$100,001 - $150,000 40%
$150,001 - $200,000 30%
$200,001 + 20%

 The $2,000 limit does not apply to the credit rate of 20%.

Imagine the Savings - An Example1

Mortgage Amount


Mortgage Interest Rate2


Mortgage Interest


Mortgage Credit

40% (capped at $2,000 annually)


Tax Credit Amount3



Amount Tax Deductible



This is a dollar-for-dollar reduction against your federal tax liability. Any portion of mortgage interest not eligible as a tax credit may be a standard deduction on schedule A of your tax return. Please consult a tax advisor for additional guidance.

1For illustrative purposes only. 2Interest rates change periodically. 3Subject to change annually as amount of mortgage interest and tax liability varies.

Eligible Homebuyers

This program is open to homebuyers who:

  • Purchase a home using a qualified PHFA loan program
  • Will use new home as their primary residence and home value is less than $331,400
  • Will not own a home at time of closing
  • Are looking for a home in Columbia, Montour and Northumberland Counties (additional counties may qualify with different terms and limits)
  • Have incomes less than $88,800 for households with one or two people, or $103,600 for households of three or more* 

More about a Credit Certificate Mortgage

  • Does the credit ever expire? No, not as long as home remains your principal residence and interest is being paid on the mortgage. It would expire if the home were sold. The credit may still apply if you refinance.
  • What are the credit limits? The annual tax credit can be up to 50% of the annual interest paid on the mortgage loan up to a maximum of $2,000. It cannot be larger than your annual federal tax liability, after all credits and deductions. Any remainder of the interest can be taken as a standard deduction on schedule A of your tax return, as you would with standard mortgage interest.
  • Is there a fee for a credit certificate mortgage? No.
  • Who will service my loan? First Columbia Bank will work directly with you through the closing of your home, and ongoing servicing will then be provided by PHFA for the life of the loan.
  • Are there any other benefits of a PHFA loan? Yes. Access modification funds and additional down payment and closing cost assistance may be available for persons with disabilities. In addition, home repair programs are available. Homebuyers can also take advantage of free credit counseling and homebuyer education programs.

* Lower income thresholds apply when loan is combined with other government mortgage programs. Applicants must meet the eligibility requirements for a PHFA mortgage loan. Loans subject to credit approval. Tax credit may exceed $2,000 for loan amounts greater than $200,000. Funds for the tax credit are provided by PHFA as part of their Mortgage Credit Certificate Program. First Columbia Bank does not guarantee the availability of future credits if the program or PHFA cease to exist.Member FDIC.