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The Mortgage Credit Certificate (MCC) is an IRS tax credit that can reduce a homeowner's tax liability on their federal return.
Who
is this program for?
How
does the program work?
What
properties are eligible?
What
else do I need to know?
Where
do I apply??
Who
is this program for?
This program is for First Time Homebuyers with a household income that does not exceed the program income limits. The applicants and ALL household members over the age of 18 must be first time homebuyers.
A first time homebuyer is defined as someone who has not had ownership of any real estate in the previous 36 months.
A displaced homemaker and a single parent who owned a home with his or her spouse while married may be exempt for the 36 month rule.
The first time homebuyer requirement is waived for home in targeted neighborhoods.
The income limits for this program can be Found on the INCOME LIMITS PAGE
How
does the program work?
The program gives homeowners a tax credit equal to 20% of the annual interest paid on the mortgage loan. The remaining 80% of the mortgage interest paid would continue to be an itemized deduction.
"The mortgage interest deduction
is one of the benefits of homeownership. Most often, the interest and property tax deduction
allows you to reduce your taxable income in comparison to taking the standard deduction"
Example: (interest rates and property tax rates are for illustration purposes only. They do not necessarily reflect actual rates. Tax assumptions are for illustration purposes as well.
We are not tax advisors. Contact your tax accountant or the IRS for guidance.
You and your spouse file a joint tax return
Your Adjusted Gross income $58800
Federal Income tax withheld $9150
Property Taxes paid $4,646 Interest Paid $12928
With the standard deduction:
With interest and property tax deduction:
With MCC credit of $2585
Adjusted
Gross income
Deduction
Exemptions
Taxable Income
Tax Liability
Tax Refund
$58,800
$12,600
$8,000
$38,200
$4,811
$4,339
$58,800
$17,574
$8,000
$33,226
$3,061
$6,089
$58,800
$14,989
$8,000
$35,811
$1,866
(after MCC credit
$7,284
You could adjust your W-4 withholdings to benefit on a monthly basis rather than by waiting for the tax refund at the end of the year.
Due to recent federal tax changes, CalHFA 1st lien programs will not use the MCC program benefit to assist in qualifying. The buyer can still apply for the MCC and receive potential tax benefits.
What
properties are eligible?
- Single family homes, town homes and condominiums . Duplexes and two-on-one units are NOT eligible.
Due to recent federal tax changes, CalHFA has suspended their MCC program which will affect properties located in unincorporated areas of specific counties. Please check THIS list to see if your county is affected
Homes located within certain Census tracts are considered to be in targeted neighborhoods and will have no First Time Homebuyer requirement. To confirm that the home is located within a targeted census tract, contact me directly OR input the property address HERE and compare the census tract number to the ones found HERE.
General Area
Normal Heights
Loma Portal
52 Freeway Area
Kearney Mesa/Clairemont Area
Miramar Area
City Heights/East San Diego
East San Diego
Black Mountain Area
Southeast San Diego
Southeast San Diego
Logan Heights
Barrio Logan
Downtown
South San Diego/San Ysidro
What
else do I need to know?
As already mentioned, these guidelines are not the complete set of eligibility and qualification requirements but rather an over view.
- The program can be used with FHA, VA and conventional loans with fixed or adjustable rates
- Home must be purchased as a primary residence
- Homebuyers who sell their home within 9 years may be subject to recapture of a portion of the tax benefit. More information can be found in this IRS publication.
- There is a fee for applying to the program. The amount varies depending on the location of the property and the agency that is managing the program. For more information contact me ME directly
Where
do I apply??
Applications are made through an approved participating lender
Laura Borja with Ocean Lending is an approved participating lender
START
ONLINE
(619)
992-4061
BY PHONE
Download the application worksheet
BY FAX
(866) 765-3804
To schedule an appointment
Call
(619) 992-4061
Or
Schedule Online
IN PERSON
Download the application checklist
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Laura Borja | Senior Mortgage Consultant | NMLS#199107
Cell: (619) 992-4061
laura@lauraborja.com
27271 Las Ramblas ste 150 Mission Viejo CA 92691
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This website is not authorized by the New York State Department of Financial Services to accept mortgage loan applications for properties located in New York. Intended for California Consumers Only.
Ocean Lending Home Loans Inc. NMLS ID #1626788 (www.nmlsconsumeraccess.org). 27271 Las Ramblas ste 150 Mission Viejo CA 92691 (888) 508-5030. All rights reserved. This is not an offer to enter into an agreement. Information, rates, & programs are subject to change without prior notice and may not be available in all states. All products are subject to credit & property approval. Ocean Lending is not affiliated with any government agency. Licensed by the Dept of Business Oversight under the California Residential Mortgage Lending Act License # 41DBO-76602 and Finance Lenders Law Lic # 60DBO71981