Using an OHFA Loan More Than Doubles the Credit
Program and regulatory figures verified September 25, 2026. Details change; confirm your scenario with us.
The mortgage tax credit is the most under-used thing OHFA runs, partly because the recapture rule sounds frightening until you read what OHFA does about it.
Two versions, very different rates
Rates and fees from the OHFA Programs at a Glance; OHFA's consumer summary is at OHFA's Mortgage Tax Credit page.
| MTC Basic | MTC Plus | |
|---|---|---|
| Credit rate | 15% non-target, 20% target | 40% |
| OHFA loan fee | $500 | $250 |
| First mortgage | Lender selects a fixed-rate non-OHFA loan | Any OHFA First-Time Homebuyer loan, including down payment assistance, Ohio Heroes and Grants for Grads |
The gap is the story. A buyer using their own lender's non-OHFA loan gets a 15% credit in most of Ohio and pays $500 for it. The same buyer on an OHFA first mortgage gets 40% and pays $250.
That is more than double the credit for half the fee, and it stacks on top of the down payment assistance rather than competing with it. OHFA's own stacking diagrams show First-Time Homebuyer plus assistance plus MTC Plus together.
Who can have it
The first-time homebuyer definition applies, with its usual three routes: no ownership interest in a principal residence in the last three years, or an honourably discharged veteran, or a property in a designated target area census tract. MTC income limits apply.
The exclusion to know: Next Home borrowers are not eligible for the Mortgage Tax Credit. So a repeat buyer who does not qualify through the veteran or target-area routes gives this up entirely. On a long hold that is one of the more expensive consequences of the Next Home route. The program comparison.
Title on MTC loans is limited to occupant borrowers and their spouses.
The recapture rule, read carefully
Federal recapture tax is the reason a lot of buyers walk away from mortgage credit certificates, usually without checking the conditions. OHFA's guidelines set out three, and all three have to happen together.
- The borrower sells the residence within nine years of the closing date.
- Household income has increased more than the amount allowed under the Internal Revenue Code.
- The house is sold at a net profit.
Miss any one and there is no recapture. Sell in year ten, no recapture. Sell at a loss, no recapture. Income flat, no recapture.
Then comes the sentence that changes the calculation entirely: OHFA will reimburse for the actual amount of recapture paid to the IRS.
So even in the case where all three conditions coincide, OHFA reimburses what you actually paid. That is a materially different risk profile from the way recapture is usually described, and it is published in OHFA's own program guidelines.
We are lenders rather than tax advisers, and how recapture interacts with your return is a question for your CPA. What we can tell you is what OHFA's guidelines say, and they say OHFA reimburses.
One honest caveat
OHFA notes that interest rates could be slightly higher when using the MTC Plus program. We do not publish rate figures here, so the comparison between a slightly different rate and a 40% credit is one to run on your actual numbers rather than in the abstract. Send us the scenario and we will run both.
See also eligibility and target areas, which raise the MTC Basic credit from 15% to 20%.
Frequently asked questions
What is the Ohio Mortgage Tax Credit worth?
It depends which version. MTC Plus pays a 40% credit and is issued with OHFA Market Rate First-Time Homebuyer loans, including those using down payment assistance, Ohio Heroes and Grants for Grads, with a $250 OHFA loan fee. MTC Basic is a stand-alone credit for non-OHFA loans paying 15% in a non-target area or 20% in a target area, with a $500 fee.
Do I have to pay back the Ohio mortgage tax credit if I sell?
Only if three things happen together, and then OHFA reimburses it. Recapture applies if the borrower sells within nine years of closing, household income has increased more than the amount allowed under the Internal Revenue Code, and the house is sold at a net profit. OHFA's guidelines then state that OHFA will reimburse for the actual amount of recapture paid to the IRS. How it affects your tax return is a question for your CPA.
Can repeat buyers get the Ohio Mortgage Tax Credit?
Not through the Next Home program, which OHFA's guidelines exclude from the Mortgage Tax Credit. A repeat buyer can still reach it if they qualify under the first-time homebuyer definition another way, either as an honourably discharged veteran or by purchasing in a designated target area census tract, both of which waive the three-year ownership test.
Can you combine the Ohio Mortgage Tax Credit with down payment assistance?
Yes. MTC Plus is offered with or without down payment assistance, and OHFA's stacking diagrams show the First-Time Homebuyer program with 3% conventional or 3.5% government assistance plus MTC Plus together. Grants for Grads and Ohio Heroes can also carry MTC Plus.
Why is MTC Plus worth more than MTC Basic?
MTC Plus pays a 40% credit against 15% in a non-target area or 20% in a target area for MTC Basic, and it costs $250 against $500. The difference is the first mortgage: MTC Plus requires an OHFA Market Rate First-Time Homebuyer loan, while MTC Basic is a stand-alone product for a non-OHFA fixed-rate loan the lender selects. OHFA notes rates could be slightly higher when using MTC Plus.
Mike Certo · NMLS #260555 · Cornerstone First Mortgage NMLS #173855 · Equal Housing Lender. Cornerstone First Mortgage is a participating lender in the Ohio Housing Finance Agency's programs. The Ohio Housing Finance Agency is an Equal Opportunity Housing entity. Loans are available on a fair and equal basis regardless of race, color, religion, sex, familial status, national origin, military status, disability or ancestry. Please visit www.ohiohome.org for more information. Educational content about financing, not a loan commitment and not legal or tax advice. OHFA program terms and limits are set by the Ohio Housing Finance Agency and change; figures here carry the date we verified them. Loans are subject to borrower and property qualification.