MCC Mortgage Credit Certificate, Orange County, CA
What is it?
The Mortgage Credit Certificate or MCC is a first time buyer benefit that is available to buyers whose income does not exceed the program limits.
Let's define a first time buyer. A first time buyer is a person who has never owned a home or has not been on title to a property for three years or more.
WHAT IS A MORTGAGE CREDIT CERTIFICATE (MCC)? An MCC is an IRS tax credit that reduces the federal tax liability of a qualified borrower. Although the program is always subject to change, as of this writing, the tax credit is 20% of the mortgage interest paid.
Does the MCC survive a refinance? Once again, programs are subject to change, but I have a client who refinanced her property where an MCC was in place. She completed the refinance and was able to keep the MCC benefit. She visited the National Homebuyer's Fund website and followed the directions on how to keep the MCC benefit through the refinance.
Can the MCC boost a buyer's qualifications? Potentially, yes. Because the MCC reduces the borrower's federal income taxes and increases his/her net earnings, it can help the borrower qualify for the initial loan.
It's important to note that both the mortgage broker (if you're using one) and the funding lender must both be approved for the program.
It's not difficult for a lender to get approved, so it shouldn't be a roadblock to using your existing lender if they're not already approved. The people at the National Homebuyer's fund are very nice and helpful! I usually speak with Danh when I call. The number is (866) 643- 4968.
How do you ensure you receive the tax benefit? If you use the services of a tax preparer, be sure to make them aware that you have an MCC.
The National Homebuyer's Fund administers the MCC program as well as other programs that may be beneficial to buyers who qualify. Check out nhfloan.org for more information.
JILL MURTY, Realtor | 949.355.5321
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