Increase your disposable income. Increase your buying power. MCC – Mortgage Credit Certificate (sponsored by CalHFA) (CA only) (The income limits in this power point are loans without a CalHFA 1st) Increase your disposable income. Increase your buying power. Decrease your tax liability Only Available on CA properties. 06 19 2017

MCC Borrower Eligibility Each CalHFA MCC Tax Credit Applicant must be a US citizen or permanent resident alien. All CalHFA MCC Tax Credit Applicants must meet the credit, income and loan requirements of the CalHFA MCC Tax Credit program handbook, the Lender, and the mortgage insurer/guarantor. 06 19 2017

MCC Tax Credit Program 2014 Exception to a 1st time homebuyer Home is located in a Targeted Area - A targeted area has been identified as an area where 70% of the families have an income which is 80% or less than the statewide median income. Qualified Veteran – defined as a person who served in the active military, naval or air service and was discharged or released under conditions other than dishonorable. 06 19 2017

What products can I use with the MCC? PLEASE INDICATE ON SUBMISSION SHEET THAT YOU ARE INCLUDING AN MCC CREDIT WITH YOUR LOAN SUBMISSION. *FHA *VA *Conventional *SAPPHIRE HELP *USDA *Tax Credit can help with qualifying – Conventional add to income; FHA subtract from debt; VA offset fed tax liabilities & deductions 06 19 2017

Example of Monthly Savings 06 19 2017

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MCC Program Things to considered: No minimum FICO Sales Price Limits - see CalHFA sales price charts Income Limits – see CalHFA MCC income charts Ownership status – 3 years tax returns will be required. No homeownership training classes required of the borrower. $750.00 fee collected at closing. Must be included on 809 of the LE. ($450 if using with a CalHFA product) 06 19 2017

It starts here…. The applicant applies for a loan with Broker. Broker determines if the Applicant is a possible candidate for a CalHFA MCC Tax Credit based on income, acquisition costs, prior ownership and tax liability. Buyer and seller sign and execute purchase and sale agreement. Broker provides proper paperwork to Lender (later listed in this PowerPoint). Essex will require 3 year tax returns, or Affidavit due to low income and no returns filed. Essex will reserve the funds for 90 days at time docs are drawn. Expired funds are subject to availability of MCC funds. Essex reviews all documentation and provides MCC Certificate after closing. Essex closes the loan and submits to CalHFA after closing Essex does not need to submit paperwork to CalHFA prior to our closing, allowing for a quick close.  06 19 2017

Don’t Forget!!!! The $750 fee! THERE IS AN MCC FEE FOR $750.00 IT HAS TO BE DISCLOSED UP FRONT ON YOUR LE. BE SURE TO INCLUDE THE MCC FEE OF $750.00 IN BOX 809 YOUR LE. The fee is only $450 if using with a CalHFA product. 06 19 2017

Lender vs. MCC (CALHFA) Review of Income 06 19 2017

Schedule C or E Income – do not add back in depreciation. Notes of Interest on how CalHFA calculates maximum household income for family or anyone who is living in the house – not just borrowers . Schedule C or E Income – do not add back in depreciation. Negative is a wash, not deducted. Do not back out 2106 expenses. 2013 and YTD income (no 2012 income is reviewed since we are in 2014). P&L’s are okay for 2014. In question, CalHFA will always take the higher income. Child Support Payments Social Security Benefits Welfare Payments Spousal support Sick pay Disability payments Deferred income Any regularly occurring additional income including but not limited to earnings 06 19 2017

MCC (CalHFA) Property Eligibility 06 19 2017

ELIGIBLE COUNTIES – All Counties In California! 06 19 2017

CalHFA Sales Price Limits http://www.calhfa.ca.gov/homeownership/programs/mcc.pdf 06 19 2017

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2017 Sales Price Limits 06 19 2017

2017 MCC Sale Price Limits 06 19 2017

MCC INCOME LIMITS WHEN USED WITH A CALhfa Conventional 1st TD Conventional limits - http://www.calhfa.ca.gov/homeownership/limits/income/income-conventional.pdf   WHEN USED WITH A Calhfa FHA 1st TD FHA limits - http://www.calhfa.ca.gov/homeownership/limits/income/income-fha.pdf WHEN USED WITH ALL OTHERS: MCC Standard Limits - http://www.calhfa.ca.gov/homeownership/limits/income/income-mcc.pdf ********See next page for a breakdown of the Standard Income limits  06 19 2017

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Income continued – Standard MCC 06 19 2017

Income Continued – Standard MCC 06 19 2017