Perhaps one of the most widely available mortgage assistance programs in today’s market is also one of the least-used. That’s because many mortgage lenders shy away from the program due to the way the MCC works. But that’s too bad as the MCC can help buyers qualify for the home they really want. The MCC isn’t complicated, it just takes a lender experienced with the MCC program. The California Housing Finance Agency, or CalHFA teams up with California counties to make sure buyers are aware of the program and have access to it. The MCC is in fact a federal program administered by local lenders and works by converting mortgage interest into a tax credit, helping them qualify for the home they really want. Lenders can use the amount for the annual tax credit as way to boost monthly income and can be sued with most any loan program.
Who can take advantage of the CalHFA MCC program? Borrowers are required to be a first time homebuyer who technically means the buyers must not have owned a home within the previous three years. That means someone who owned a home more than three years ago but not within three years can take advantage of the MCC program and can only be used to finance a primary residence and not a rental property. Buyers must also meet the lending guidelines of the selected mortgage used to finance the property and must live in the property for the life of the loan. The CalHFA MCC program can be used with a conventional, VA, FHA or USDA mortgage.
There are also specific sales price limits that can vary county-by-county and the home cannot be located on a property that is more than five acres in size and can be a single family residence, within a PUD or a condominium. Eligible areas can be found online or by speaking with a loan officer at an approved CalHFA lender. If you feel you meet these guidelines and want to take advantage of this tax credit program to help qualify for the home you want to buy, it’s time to contact an experienced loan officer who can walk you through the MCC process.