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Investor Forum in FREMONT CA 9/16/09! RSVP Here!
Join us with Bob Snyder and learn from a ton of Real Estate Entrepreneurs and Investors. This will be a packed evening event where you will learn nuts and bolts Real Estate Investment knowledge to take advantage of what is happening in the market RIGHT NOW!
Until Next time Here is to your success! Jason Wheeler 925-285-2172 | Come to a FREE Bay Are Event |
The Mortgage Credit Certificate Program, authorized by Congress in the Tax Reform Act of 1984, provides financial assistance to "First time homebuyers" for the purchase of new or existing single-family home. In 1985, the State adopted legislation authorizing local agencies, such as Contra Costa County, to make Mortgage Credit Certificates (MCCs) available in California. Contra Costa County MCC authority can be used in all cities as well as the unincorporated areas of the County. The Contra Costa County Community Development Department will administer the program.
The MCC Program is a homebuyer assistance program. The MCC provides qualified first time homebuyers with a federal income tax credit. Income tax credits reduce an individual's tax payment(s) by an amount equal to the credit. Under the MCC program, the maximum tax credit available is equal to 20 percent of the annual interest paid on the borrower's mortgage. By reducing the borrower's federal tax liability, the tax credit essentially provides additional income which can be used for mortgage payments.
In the example given in Table 1, a borrower with a 7.5 percent fixed rate 30-year mortgage of $150,000 would make $11,203 in interest payments during the first year of the mortgage.1 Under normal circumstances, the borrower deducts 80 percent of that interest ($8,962 in our example)-along with other allowable deductions-from his total gross income in order to figure the "adjusted gross income" used to calculate his/her total tax liability. After the borrower has calculated the total tax liability, under the MCC program the remaining 20 percent of the interest ($2,241 in our example) is also deducted from his/her total tax liability. If this subtraction results in a negative number-in other words, if the borrower is unable to use the entire MCC tax credit in this particular tax year-the credit may be carried forward and used, up to three calendar years in the future. The borrower may consider adjusting his/her federal income tax withholding (W-4) so as to benefit on a monthly basis for the MCC. By taking this action, the borrower will have more disposable income to make mortgage payments.
Table 1: Effect of a Mortgage Credit Certificate - Example | ||
1. | First Mortgage Amount | $200,000 |
2. | Mortgage Rate Interest | 7.5% |
3. | Annual Interest Payment | $15,000 |
4. | Mortgage Credit Certificate Rate | 20% |
5. | Annual MCC Amount (Line 3 x Line 4) | $3,000 |
6. | Monthly Credit Amount (Line 5 ÷ 12) | $250 |
Note that the MCC program applies only to the borrower's federal tax liability. State taxes are not affected.
Mortgage Credit Certificates are available to first-time homebuyers in Contra Costa County. Table 2 shows the purchase price and income limitations for MCC Program participants.
Table 2: MCC Program Purchase Price and Income Limitations | ||
| Purchase Price | Non-Target Areas | Target Areas |
| New (never occupied) units | $629,005 | $768,784 |
| Existing (resale) units | $619,381 | $757,021 |
| Income | ||
| 1 and 2 person households | $100,560 | $120,672 |
| 3+ person households | $117,320 | $140,784 |
To obtain an MCC, a purchaser of a new or existing single-family home works with any mortgage lender participating in the MCC program and applies for an MCC and a mortgage loan at the same time. Lenders process the underlying mortgage using standard procedures, with adjustments to those procedures as needed to satisfy the MCC requirements. The lender is responsible for underwriting and execution of required State and federal certifications and affidavits. The County reviews executed certifications and affidavits from the lender in order to determine qualification and eligibility of the MCC applicant.
An MCC cannot be issued to a homeowner who is refinancing an existing mortgage or to an applicant desiring to assume an existing mortgage unless (1) the mortgage is held by a current MCC holder and (2) the sales price of the house being sold falls under the sales price maximum for the program. In all other cases, only new, first mortgages are eligible for MCC participation.
Loans with an MCC attached to them can be refinanced once and the MCC can be reissued. If the refinance loan is then refinanced, the homeowner loses the MCC. The RMCC can be done directly with the homeowner without involving the lender. There are no restrictions regarding the amount that can be refinanced. The fee for an RMCC is non-refundable $200. RMCC Letter, RMCC Application, RMCC Certifications, RMCC Application Checklist
The number of MCCs available depends on the amount of issuing authority for which the jurisdiction applies.
In order to discourage individuals from buying a home primarily to benefit from the tax credit and short term appreciation potential, the federal government has initiated a recapture of a portion of the tax credit if a home is sold within the first nine years after purchase. Certain conditions must exist for the recapture to take effect. The County MCC staff and your lender can outline the specifics of this recapture program at the time of your application.
The Contra Costa County MCC Program eligibility requirements are as follows:
Until Next time Here is to your success! Jason Wheeler 866-833-7413 | Come to a FREE Bay Are Seminar |
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How do you feel about a "Government Overhaul" of the Financial Industry? Do you find it alarming that Washington wants to give this kind of power to the FED? To push something like this through so fast seems reckless. Giving the the FED the power to meddle in private business affairs when it deems things to be in trouble goes against everything in the Bill of Rights. Not to mention the FED policies of the Greenspan era are what created this whole mess to begin with. What makes Washington think that they can clean it up?
Where will the Government intervention stop? How will this type of Government control change business and Bay Area Real Estate? If history is any kind of teacher, I'm afraid we are in for years of financial issues.
Until Next time Here is to your success! Jason Wheeler 866-833-7413 | Come to a FREE Bay Are Seminar |
Get FREE MP3 of Think and Grow Rich and download the ebook by Napoleon Hill!
Wednesday and Thursday saw our highest 30 year fixed rates of 2009 beating last Wednesday's record high. It is the third consecutive week where we have set a new high. We did bounce back at the end of the week thanks in part to a fairly well received 30 year treasury bill auction but we still closed down -25 basis points (rates got higher) from the previous week.
There has been a lot of volatile in the market and the long term trend is still upward although we are enjoying quite a pull back. If you are in the market take advantage and lock in if possible.
Until Next time Here is to your success! Jason Wheeler 866-833-7413 | Come to a FREE Bay Are Seminar |
Get FREE MP3 of Think and Grow Rich and download the ebook by Napoleon Hill!
If you are in business you are in the business of marketing! No matter what your product or service is you must have an effective scalable marketing plan. There is no blue print to a marketing plan but many say that in order to increase your efficiency in business you should have at least seven different sources that consistently provide your business with traffic, leads and ultimately sales. You MUST also have a great retention plan to stay in touch with clients and business partners. I would like to share several sources that have proven to me over time to be very valuable in creating leads and keeping them in your pipeline.
Stay tuned for elaboration on each one of these sources and how you can use them!
Until Next time Here is to your success! Jason Wheeler 866-833-7413 | Come to a FREE Bay Are Seminar |
Get FREE MP3 of Think and Grow Rich and download the ebook by Napoleon Hill!
Have you been looking for a unique way to get your marketing message out? You should check out Crazy Millions! This has changed my business and helped me create buzz with a unique fun tool that people actually keep and pass around. You can give them out as a novelty and who knows what you will find. Hide them in a magazine or bill fold and just watch the results. Printing is quite inexpensive and it's a good way to set you apart.
Until Next time Here is to your success! Jason Wheeler 866-833-7413 | Come to a FREE Bay Are Seminar |
Get FREE Copy of Think and Grow Rich on MP3 to Succeed in Real Estate!
Try us out for a few updates on lending, business tips and real estate and we will give you a FREE copy of Napolean Hill's Classic "Think and Grow Rich" along with 3 other FREE Gifts just for looking!
