1. 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.

2. 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.

3. 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.

4. 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

5. Example of Monthly Savings

7. 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.
$ fee collected at closing. Must be included on 809 of the LE. ($450 if using with a CalHFA product)

8. 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. 

9. 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 $ IN BOX 809 YOUR LE.
The fee is only $450 if using with a CalHFA product.

10. Lender vs. MCC (CALHFA) Review of Income

11. 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

12. MCC (CalHFA) Property Eligibility

13. ELIGIBLE COUNTIES –
All Counties
In California!

14. CalHFA Sales Price Limits

16. 2017 Sales Price Limits

17. 2017 MCC Sale Price Limits

18. MCC INCOME LIMITS WHEN USED WITH A CALhfa Conventional 1st TD
Conventional limits -
WHEN USED WITH A Calhfa FHA 1st TD
FHA limits -
WHEN USED WITH ALL OTHERS:
MCC Standard Limits ********See next page for a breakdown of the Standard Income limits 

20. Income continued – Standard MCC

21. Income Continued – Standard MCC