1 empowering first time homebuyers texas mortgage credit program

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Empowering First Time Homebuyers

Texas Mortgage Credit Program

TDHCA -Texas Homeownership Division

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What is a Mortgage CreditCertificate (MCC)?

• A MCC is a federal income TAX CREDIT.

• Based on the mortgage interest paid each year.

• Amount of tax credit is established by HFA and can range from 10% -

50% of the annual mortgage interest paid – not to exceed $2,000 per

year.

• This credit reduces the federal income taxes of the buyer and has the

potential of saving the MCC holder thousands of dollars over the

life of the loan.


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MCC EXAMPLE:


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How a Homebuyer Uses the MCC

•The borrower claims the credit with their annual tax return using IRS Form 8396.

•The credit may be claimed for the life of the loan as long as the home is their principal residence.

•The borrowers may, if they choose, adjust their W-4s to reflect the anticipated credit.

•Anticipated credit may be used to help qualify the borrower for a loan. If the tax credit is $2,000, the monthly adjustment is $166.67 per month.


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TDHCA MCC HISTORY

• TDHCA Launched its MCC Program in 2003

• Program Size $60 - $525 Million

• Fees Assessed:

•1% of Mortgage Amount

• Next Program Release

•May 2015 - $799 Million


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Underwriting/Loan Terms

Underwriting Options:

FHA – VA – USDA/RHS – Conventional

Eligible Loan Terms:All loan types must be 15 or 30 year fixed rate

-No ARMs AllowedHomebuyer Education Required:Face to Face or On-Line Counseling Allowed

Loan Closing:

Must close within 90 days of reservation date


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TDHCA MCC Process

How a Homebuyer Applies

• Homebuyer Applies For The MCC Through a Participating Lender – Currently Over 100 Lending Institutions - At The Same Time He or She Makes a Formal Mortgage Loan Application.

• Lender Determines Program Eligibility and Reserves MCC in Loan Reservation System. All Program Documents are Form-Fillable, Auto Populated and Sent to Closing for Signature.

• Lender Proceeds With Closing Mortgage Loan and Submits MCC Closing Package Within 30 days Following Closing Date

• MCC Issuance Fee (paid at closing)

• TDHCA Staff Reviews Closing Package/Issues Certificate

• On an Annual Basis, (during January) Staff Mails Reminder Notice to Borrower Along With IRS Form 8396 and Copy of Certificate


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PROGRAM STATISTICS

Calendar Year 2014• MCC’s Issued – 1,513 on Loans Totaling $219M

• Stand Alone 1,084 – Combos 429 (39% of Production)

• Average Annual Income - $50,695

• Average Loan Amount - $146,691

• 66% of Borrower’s Earn 80% AMFI or Below

• New Construction 48% - Existing 52%

• Revenue Generated- $1.5 Million


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CREDIT RATE & FEES

Calendar Year 2014

• MCC Credit Rate 40%

Fees Assessed

• 1% of Mortgage Amount

• If Combined With TDHCA Mortgage Loan/Issuance Fee Waived


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MARKET - MARKET - MARKET

Target Existing Lender Network/Builder Partners

• Utilize Training Materials with Sample Tax Returns

• Conduct Webinar and Office Trainings as Requested

• Identify Areas of State, Based on Income, Where MCC is Most Beneficial to Borrowers

• Develop Marketing Materials for Realtors and Lenders with MCC Example

• Partner with State Realtor Association to Develop Affordable Housing Continuing Education Course

• Google Ad Campaign

• Participate in Realtor and Mortgage Industry Events

• Online MCC Course


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MARKET - MARKET - MARKET

• Top Lending Partners

• DHI Mortgage Company, Ltd.

• Cornerstone Home Lending, Inc.

• Premier Nationwide Lending

• Pulte Mortgage LLC

• Guild Mortgage Company

• Network Funding, L.P.


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THANK YOU

Eric Pike

512-475-3356

[email protected]

www.myfirsttexashome.com

mailto:[email protected]