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.
What is an MCC?
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.
How does the MCC reduce your taxes?
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.
What are the purchase price and income limitations for MCC Participation?
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
How does a borrower obtain an MCC?
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.
May an MCC be used with a re-financed loan or to assume an existing mortgage?
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
How many MCCs will be available under the program?
The number of MCCs available depends on the amount of issuing authority for which the jurisdiction applies.
Potential for recapture of portion of the tax credit if home is sold within the first nine years after purchase.
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.
APPLICATION AND ELIGIBILITY REQUIREMENTS FOR MCC PROGRAM
The Contra Costa County MCC Program eligibility requirements are as follows:
MCCs will be available only to "first-time homebuyers", (i.e. not owning a home within the past three years).
As first-time homebuyers complete their normal loan application process with a participating lending institution, their mortgage lenders will prepare MCC applications and forward them to the County. The County will then issue MCCs on a first-come, first-served basis according to when the initial application is received by the County. County staff requires 5-7 days for application review and processing.
Applicants may buy a residence only for their own occupancy, not for rental or reinvestment. Occupancy as "principal residence" must be within 60 days of the close of escrow.
Applicants must pay a non-refundable application fee of $200 at the time the lender applies to the County on their behalf.
The MCC can be used when buying a new home with a maximum purchase price of $629,005, ($768,784 in Target Areas) or an existing home with a purchase price that does not exceed $619,381 ($757,021 in Target Areas).
MCCs can only be transferred in cases where the home is being sold to another eligible MCC applicant. In such a case, all MCC requirements must be met and the mortgage must be assumed for the transfer to occur.
The house must be within the city limits of Pleasant Hill and owner-occupied. The current, combined monthly income of the entire household must be less than the amount listed on the bottom of the next page – based upon family size. It is important to note that this program is designed for Pleasant Hill homeowners who are not able to qualify for conventional loans.
ELIGIBLE PROPERTIES
The dwelling must be located in residential districts and areas designated for residential use within the City of Pleasant Hill.
The dwelling must be the primary residence of the owner.
The dwelling is in a condition such that rehabilitation within the scope of this program will bring the unit into a safe and habitable condition.
The dwelling must have sufficient equity to secure the amount of the loan. The rehabilitation loan must be a first or second loan against the property and may not be a “third” or lower, even though there may be sufficient equity to cover such positions.
FINANCIAL ASSISTANCE
Maximum loan amount is $60,000. Minimum loan amount is $5,000.
Loan interest rate is 3% fixed, simple interest with an initial 15-year term. The loan terms may be extended in 5-year increments, after the initial 15-year term, provided the homeowner still meets the income qualifications.
Loan repayments may be amortized, deferred, or interest only. The loan committee has the ultimate decision with regard to loan repayment.
TYPES OF REHABILITATION
Health and safety hazards will be given top priority for consideration in the program. Common repairs associated with a rehabilitation project include but are not limited to:
New roof, gutters and downspouts
Attic and wall insulation
Kitchen and/or bathroom upgrades
Repair/replace concrete driveways, walkways or porches that present a “trip and fall” hazard
Drainage work
New interior and/or exterior paint
Sewer work
Replacement of worn flooring
Replacement of single pane windows with new, dual pane, energy efficient windows
Fences are allowed to be replaced but under very limited circumstances, such as a safety item due to a backyard swimming pool
Work will be performed by pre-certified contractors participating in a competitive bid process. In special circumstances, contractors are not on the pre-approved list may be allowed to perform the work, if they meet program guidelines.
2008 MONTHLY INCOME LEVELS
Number of Persons Living in House 1 2 3 4 5 6 7
Total maximum income $5,025 5,742 6,458 7,175 7,750 8,325 8.900
When you buy a home do ask your professional about Mortgage Credit Certificates for your county?? Most won't tell you about them because they don't know about them. There are very few lenders and banks that are able to process these and the savings is very significant. You can save 20% of the interest you pay on a mortgage every year for the entire time you have your loan. If you are going through the process it is absolutely something to take a look into. Right now I am working with a client who is set to save around $400 every month. You can learn all about them if you get in touch with us or you can look at your County's Website.
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.
Face to Face Networking - Many avoid this but it is by far the best way to grow just about any business. Great organizations like BNI and your local Chamber of Commerce will get you in front of people that can turn into business partners.
Fancy Fliers - there are several creative sources like Crazy Millions that provide unique fliers that people hold on to. We average a 3% to 5% call return from this source.
Online Lead Sources - Can't find enough leads? You can buy them online cheap. Sources like Reference USA are free and Info USA is very affordable. Depending on what you are selling, it is likely you can find leads online.
Online Social Networking - Any business owner that is not turning leads from Facebook, LinkedIN and other networking sites are completely missing the boat. Make friends and make an appointment!
Making the Calls! - This is the part that many business owners dread. You can create a Phone Zone group or use a service like CitaLink that will have you making 100 calls in an hours time!
Staying in Touch -with clients and customers that are just not ready to buy or partner with you is crucial. Sites like www.TXTBlaster.com and AWeber are inexpensive and great for staying in touch.
Stay tuned for elaboration on each one of these sources and how you can use them!
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.
Do something new this week and come join us for one of our life changing events throughout the Bay Area. You will likely become a product of the people that you spend your time with! Come spend time with several self made millionaires and successful Investors and Business owners at one or our events this week in the CA Bay Area. These Workshops are normally valued at $100 per ticket however we have a few extra vouchers and would love for you to join us.
Wed Evening Hilton Garden Inn Emeryville This is a powerful overview of our Real Estate Investment Solutions. We are exploding and looking for sharp people that deserve a better life. Come and learn how to create massive success! Business attire is strongly suggested. Arrive early to network 6:30-7 with entrepreneurs and investors of the community.
Thursday Sheraton Hotel Sunnyvale ***VIP TRAINING WITH JEFF COMBS 5-6:30pm!!** Followed by a powerful overview of the our solutions in Real Estate Investing 7-8:30pm! Come prepared for continued success in 2009! We are exploding and looking for sharp people that deserve a better life. Come and learn how to create massive success with Real Estate Investing! Business attire is strongly suggested. Arrive early to network 4:30-5 before Training or 6:30-7 before the Briefing with entrepreneurs and investors of the community.
It's become obvious that the financial worries in this country and in the world are infectious and spreads like wildfire. In times like today it is very important that we have plans in place to make sure you don't become a victim of this current so called financial crisis. I talk to hundreds of people each week, and one of the my favorite questions to ask people are "How is today's economy affecting your day to day life?" Almost everyone says things are horrible. The biggest problem is that very few take personal responsibility and take the action steps required to make things better for themselves.
Forget about TV and the mainstream news! Read a motivating book instead and fill your mind with something positive.
Learn something new everyday! Make a point to do SOMETHING to improve on your current skills or learn a new one. Do you know about financial literacy and investing? Are you well versed in Stock Options and Real Estate Opportunities that are available to anyone in today's market?
Evaluate your activities every day! Without evaluation you will never learn what NOT to do. At the end of every day ask yourself. What did I learn today? What did I do today to make my situation better? Questions like these will lead you to the answers that open doors and opportunities.
The fact is that in time like this it is easy to get caught up and let life happen to you! It all starts with how you think and what you do.
Are you still waiting to get into the real estate market? If you are on the fence or nervous about the state of the economy and the real estate market that is understandable. The way the media fills our heads with doom and gloom is hard to overcome at times. However if you want to do something for your future and truly start creating wealth for yourself you need to STOP listening to your friends and the news NOW! There has never been a better time to buy real estate for your residence or as an investment! Rates are at all time lows right now and home prices in the CA Bay Area are so low you can finance a 3 bedroom home for less than you would pay rent on a 2 bedroom apartment. Here are a few action steps to get moving!
Get financing in order (Talk to a Loan Consultant you feel like you can trust) today rates are as low as 4.5%
Connect with a GOOD Realtor (Get a referral from a friend)
Educate yourself on different entrance and exit strategies
Are you a Chronic Procrastinator? Chances are that procrastination is the main barrier keeping you from reaching your goals. This article from www.MindTools.com is a great blueprint to stop this chronic behavior and start taking actions toward the goals that you deserve to reach!
If you’ve found yourself putting off important tasks over and over again, you’re not alone. In fact, many people procrastinate to some degree - but some are so chronically affected by procrastination that it stops them achieving things they're capable of and disrupts their careers.
The key to controlling and ultimately combating this destructive habit is to recognize when you start procrastinating, understand why it happens (even to the best of us), and take active steps to better manage your time and outcomes.
Why do we Procrastinate?
In a nutshell, you procrastinate when you put off things that you should be focusing on right now, usually in favor of doing something that is more enjoyable or that you’re more comfortable doing.
Procrastinators work as many hours in the day as other people (and often work longer hours) but they invest their time in the wrong tasks. Sometimes this is simply because they don't understand the difference between urgent tasks and important tasks, and jump straight into getting on with urgent tasks that aren't actually important.
They may feel that they're doing the right thing by reacting fast. Or they may not even think about their approach and simply be driven by the person whose demands are loudest. Either way, by doing this, they have little or no time left for the important tasks, despite the unpleasant outcomes this may bring about.
Another common cause of procrastination is feeling overwhelmed by the task. You may not know where to begin. Or you may doubt that you have the skills or resources you think you need. So you seek comfort in doing tasks you know you're capable of completing. Unfortunately, the big task isn't going to go away – truly important tasks rarely do.
Other causes of procrastination include:
Waiting for the “right” mood or the “right” time to tackle the important task at hand
A fear of failure or success
Underdeveloped decision making skills
Poor organizational skills
Perfectionism ("I don't have the right skills or resources to do this perfectly now, so I won't do it at all.")
How to Overcome Procrastination:
Whatever the reason behind procrastination, it must be recognized, dealt with and controlled before you miss opportunities or your career is derailed.
Step 1: Recognize that you're Procrastinating
If you're honest with yourself, you probably know when you're procrastinating.
But to be sure, you first need to make sure you know your priorities. Putting off an unimportant task isn't procrastination, it's probably good prioritization. Use the Action Priority Matrix to identify your priorities, and then work from a Prioritized To Do List on a daily basis.
Some useful indicators which will help you pull yourself up as soon as you start procrastinating include:
Filling your day with low priority tasks from your To Do List;
Reading an e-mail or request that you've noted in your notebook or on your To Do List more than once, without starting work on it or deciding when you're going to start work on it;
Sitting down to start a high-priority task, and almost immediately going off to make a cup of coffee or check your e-mails;
Leaving an item on your To Do list for a long time, even though you know it's important;
Regularly saying "Yes" to unimportant tasks that others ask you to do, and filling your time with these instead of getting on with the important tasks already on your list.
Step 2: Work out WHY You're Procrastinating
Why you procrastinate can depend on both you and the task. But it's important to understand what the reasons for procrastination are for each situation, so that you can select the best approach for overcoming your reluctance to get going.
Common causes of procrastination were discussed in detail above, but they can often be reduced to two main reasons:
You find the task unpleasant; or
You find the task overwhelming
Step 3: Get over it!
If you are putting something off because you just don't want to do it, and you really can't delegate the work to someone else, you need to find ways of motivating yourself to get moving. The following approaches can be helpful here:
Make up your own rewards. For example, promise yourself a piece of tasty flapjack at lunchtime if you've completed a certain task.
Ask someone else to check up on you. Peer pressure works! This is the principle behind slimming and other self-help groups, and it is widely recognized as a highly effective approach.
Identify the unpleasant consequences of NOT doing the task.
Work out the cost of your time to your employer. As your employers are paying you to do the things that they think are important, you're not delivering value for money if you're not doing those things. Shame yourself into getting going!
If you're putting off starting a project because you find it overwhelming, you need to take a different approach. Here are some tips:
Break the project into a set of smaller, more manageable tasks. You may find it helpful to create an action plan.
Start with some quick, small tasks if you can, even if these aren't the logical first actions. You'll feel that you're achieving things, and so perhaps the whole project won't be so overwhelming after all.
Key points:
To have a good chance of conquering procrastination, you need to spot straight away that you're doing it. Then, you need to identify why you're procrastinating and taken appropriate steps to overcome the block.
Part of the solution is to develop good time management, organizational and personal effectiveness habits, such as those described in Make Time for Success! This helps you establish the right priorities, and manage your time in such a way that you make the most of the opportunities open to you.
Email marketing is a must have when staying in touch with a group of people! The internet has become so important to almost all marketing no matter what the product is. I've found some great software that is affordable and ultra user friendly. If you are using Constant Contact you need to take a look at this and compare it. I use this software to market to several lists including buyers, lenders and several others. Many businesses are using Constant Contact or something like it however what they don't know is you, the consumer are paying for their ultra high marketing and advertising budget. I've found that AWeber has much more to offer with a much better price tag. When you look at a marketing system there are a few things you want to look for.
Can you easily set up a list specific to a certain market?
Does the system easily let your subscribers opt in and out?
Does your system provide custom forms for opting in to what you offer?
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
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