Increase your disposable income. Increase your buying power. MCC – Mortgage Credit Certificate (sponsored by CalHFA) (CA only) Can be used with both non-CalHFA 1st and CalHFA 1st. Increase your disposable income. Increase your buying power. Decrease your tax liability Only Available on CA properties. 03182018

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. 03182018

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. 03182018

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 with a CalHFA 1st YOU CAN NOT USE TO CREDIT QUALIFY VA (Used to offset federal tax liabilities & deductions) Conventional (add to income) USDA –reduce PITI FHA (not with an CalHFA 1st ) – add to income 03182018

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 BUT NOT TO CREDIT QUALIFY 03182018

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.  03182018

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 – BUT CAN NOT BE USED TO CREDIT QUALIFY. 03182018

Lender vs. MCC (CALHFA) Review of Income 03182018

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. 2017 and YTD income (no 2016income is reviewed since we are in 2018). P&L’s are okay for 2018. 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 03182018

MCC (CalHFA) Property Eligibility 03182018

ELIGIBLE COUNTIES – All Counties In California! 03182018

CalHFA Sales Price Limits 03182018

CalHFA Sales Price Limits http://www.calhfa.ca.gov/homeownership/programs/mcc.pdf 03182018

03182018

2017 Income Limits - continued 03182018

2017 Income Limits – continued 03182018