FLORIDA HOUSING FINANCE Partners/Lenders...information is correct in online reservation system. Closer then submits closing documents to closing agency/attorney. ... Florida Housing Finance Corporation ...

Download FLORIDA HOUSING FINANCE   Partners/Lenders...information is correct in online reservation system. Closer then submits closing documents to closing agency/attorney. ... Florida Housing Finance Corporation ...

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<ul><li><p>FLORIDA HOUSING </p><p>FINANCE CORPORATION </p><p>MORTGAGE CREDIT CERTIFICATE </p><p>(MCC) </p><p>PROGRAM </p><p>LENDER TRAINING </p><p>1 </p></li><li><p>WHAT IS A MORTGAGE </p><p>CREDIT CERTIFICATE </p><p> A MCC creates a non-refundable federal income tax credit and is issued to first time homebuyers in conjunction with their mortgage. </p><p> A MCC allows a qualified homebuyer to write off a portion of the annual mortgage interest as a special tax credit, not to exceed $2,000, during each year that they occupy the home as their principal residence. </p><p> The portion or amount of the tax credit is equal to the mortgage credit rate of 50% (Florida Housings rate) multiplied by the annual mortgage interest paid. </p><p> 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 their mortgage loan. </p><p>2 </p></li><li><p>TAX CREDIT" VS. TAX DEDUCTION </p><p>A tax credit entitles taxpayers to subtract the </p><p>amount of the credit from their total federal income </p><p>tax liability, receiving a dollar for dollar savings. </p><p>A tax deduction is subtracted from the adjusted </p><p>gross income before federal income taxes are </p><p>computed. Therefore, with a deduction, only a </p><p>percentage of the amount deducted is realized in </p><p>savings. </p><p>3 </p></li><li><p>2012 MORTGAGE CREDIT </p><p>CERTIFICATE PROGRAM </p><p>The program administration and </p><p>compliance will be handled by Florida </p><p>Housing staff- not by eHousing or US Bank </p><p>A MCC is an enhancement to YOUR first </p><p>mortgage, not Florida Housings as in the </p><p>Bond Program </p><p>All loans are retained and serviced or sold off </p><p>by the originating lender </p><p>4 </p></li><li><p>2012 MORTGAGE CREDIT </p><p>CERTIFICATE PROGRAM </p><p>Program Period Expiration December 31, 2014 or until funds have been fully utilized. However, Florida Housing has resources available in case additional MCC allocation is needed. </p><p> MCC Credit Rate = 50% (.50 x amount of annual mortgage interest paid = Tax Credit Amount). </p><p> Credit is capped at a maximum of $2,000 annually. </p><p>5 </p></li><li><p>BORROWER </p><p>QUALIFICATION </p><p>Homebuyer may not have owned a home as their primary residence in the last three years (First Time Homebuyer-some exceptions apply). </p><p>Homebuyers household income and the purchase price must not exceed the maximum limits set by the Program. </p><p>Homebuyer must complete homebuyer education through a HUD approved counseling agency. Online education is acceptable if provided by a HUD approved counseling agency. </p><p>Homebuyer must occupy the home as their principal residence within 60 days of closing. </p><p>6 </p></li><li><p>BORROWER </p><p>QUALIFICATION </p><p>Homebuyer must apply for the MCC through a participating lender. </p><p>Homebuyer applies for the MCC at the same time he or she makes a formal application for a mortgage loan. </p><p>Funds will be available on a first-come first-served basis. </p><p>7 </p></li><li><p>HOW A HOMEBUYER USES </p><p>THE MCC </p><p>The borrower claims the tax credit with their annual tax return using IRS Form 8396 </p><p>The credit may be claimed for the life of the loan as long as the home is their principal residence </p><p>The borrowers may, if they choose, adjust their W-4s to reflect the anticipated credit </p><p>8 </p></li><li><p>HOW A LENDER USES THE </p><p>MCC </p><p> Following Agency and/or Investor guidelines, the anticipated credit may be used to help qualify the borrower for a loan. If the tax credit is $2,000, the monthly adjustment is an additional $166.67 per month in qualifying income or is used to lower the housing expense depending upon loan type. </p><p> 9 </p></li><li><p>MCC WORKFLOW </p><p>Step 1: Loan Officer qualifies borrower(s) for the MCC Program based on FTHB, income &amp; purchase limit </p><p>requirements. </p><p>Step 2: Loan Officer collects 3 years' tax returns from </p><p>borrower/co-borrower or spouse, completes Income Calculation Worksheet, Tax </p><p>Credit Worksheet, &amp; provides borrower(s) with Notice to </p><p>Buyer. </p><p>Step 3: Loan Officer reserves loan &amp; prints Reservation Form for submission to Underwriting. </p><p>Step 4: Underwriter certifies loan upon review of 3 years' tax </p><p>returns, applicable income documentation, Income Calculation Worksheet </p><p>completed by LO, and sales contract. </p><p>Step 5: Closing generates applicable MCC Program </p><p>documentation; Borrower/Co-Borrower Closing Affidavit, </p><p>Seller Affidavit &amp; confirms loan information is correct in online reservation system. Closer then submits closing documents to </p><p>closing agency/attorney. </p><p>Step 6: Post Closing submits closed loan file &amp; all applicable MCC Program documents to FL Housing for issuance of MCC to </p><p>borrowers. </p><p>Step 7: FL Housing reviews loan files for eligibility &amp; issues </p><p>actual mortgage credit certificate upon approval to borrower &amp; forwards copy of </p><p>MCC to lender for record retention &amp; reporting as </p><p>required by the IRS. </p><p>Step 8: FL Housing contacts lender if there are file </p><p>deficiencies &amp; works with lenders to clear exceptions . Ineligible loans may result in </p><p>non-issuance of MCC to borrowers. </p><p>Step 9: Lender reports MCC recipients to the IRS annually </p><p>as required by the Internal Revenue Service. </p><p>10 </p></li><li><p>ELIGIBLE LOAN TYPES </p><p>Underwriting Options: </p><p> FHA </p><p> VA </p><p> USDA/RHS </p><p> Fannie Mae Conventional </p><p> Freddie Mac Conventional </p><p>Eligible Loan Terms: </p><p> All loan types must be 30 year fixed rate purchase money mortgage </p><p> NO ARMs or Interest Only Loans </p><p> All loans must be originated in accordance with agency guidelines </p><p> Prevailing market ratesset by lending institution </p><p> Cannot be used with bond financing </p><p>11 </p></li><li><p>ELIGIBLE PROPERTY TYPES </p><p>ELIGIBLE PROPERTY TYPE New or Existing Single Family Units Town homes Condos Manufactured Homes Must meet FHA Standards </p><p> PROPERTIES NOT ALLOWED Rental Homes Co-ops Investment Properties Recreational, Vacation, or Second Homes </p><p> Must be borrowers primary residence. Homebuyers must not use more than 15% of the residence in a trade or business, including child care. </p><p> 11 </p></li><li><p>TARGETED AREA </p><p>*Definition of Targeted Area Census tract in which seventy percent (70%) or more of the families have an income which is eighty percent (80%) or less of the statewide median family income. </p><p> Properties within a Targeted Area- </p><p> First Time Homebuyer Requirement is waived No tax returns required </p><p> Higher Income Limits Up to 120 and 140% of AMI </p><p> Higher Purchase Price Limit </p><p>Refer to the 2012 MCC Program Guide for a list of the Qualified Census Tracts. </p><p>13 </p></li><li><p>IRS CODE REQUIREMENTS </p><p>FIRST TIME HOMEBUYER REQUIREMENT </p><p>Homebuyers using the program cannot have had a present ownership interest in any principal residence during the last three years. This will be determined by the following: </p><p> Past three years signed tax returns (2009, 2010 and 2011 tax returns are currently required). Review for mortgage interest deduction or any type of homeowner tax credit which may indicate homeownership. </p><p> 14 </p></li><li><p>IRS CODE REQUIREMENTS </p><p> Signed tax returns are required from all borrowers who will be on title as well as non-borrowing spouses. </p><p> IRS transcripts will be accepted in lieu of the 1040 EZ, 1040 A, or 1040 </p><p> If a borrower was not required to file federal tax returns in a particular year(s), an IRS printout stating No Record Found must be provided or other confirmation issued by the IRS confirming borrower was not required to file a return for that year. </p><p>15 </p></li><li><p>INCOME REQUIREMENTS </p><p>Definition of Household Income means all sources of revenue or income of the mortgagor (or mortgagors) and any other person 18 years of age or older, who is expected to permanently reside in the home being financed. </p><p>All forms of income including but not limited to: overtime, bonus, Social Security Income, child support, alimony, seasonal/part-time jobs, self-employment, interest and dividend income, and rental income. </p><p> 16 </p></li><li><p>INCOME REQUIREMENTS </p><p>Income is annualized over a 12-month period (see Program Guide). </p><p>Spouses income must be verified and included, regardless if they are on the loan, mortgage, deed/title, or are legally separated (not recognized in Florida). </p><p>17 </p></li><li><p>IRS CODE REQUIREMENTS </p><p>RECAPTURE TAX Recapture Tax is a federal tax that some homeowners that utilize these programs may be required to pay from the net profit they receive from the sale of their homes. The homeowner pays recapture tax with their federal income tax for the year in which they sell their home. The maximum tax is the lesser of 6.25% of the original loan amount or 50% of the gain on the sale of the home. For Recapture Tax to apply, they must meet all of the following conditions: </p><p> Sell the home within nine years of purchase; Make a net profit on the home, after adjusting the value of the home </p><p>for any improvements or repairs the homebuyers have made, and after deducting all costs of sale, including sales commission, and; </p><p> The homebuyers household income must have increased at least 5% each year, above the applicable AMI used to qualify borrower. </p><p>18 </p></li><li><p>IRS CODE REQUIREMENTS </p><p>Fear of paying Recapture Tax should not stop a homebuyer from utilizing the programs because of the above. Also, if the homebuyer refinances their home at a later date to obtain a better interest rate, or to use the equity they have in their home, Recapture Tax is not triggered. </p><p>There is no way to predict the exact recapture tax liability, if any, since it is based upon the situation when the home is sold. At any time it will depend on the homebuyers income, family size, and the amount of the net profit the homebuyer realizes from the sale of their home. </p><p>19 </p></li><li><p>PROGRAM FEES AND </p><p>EXPENSES </p><p> MCC Issuance Fee: $500.00 Any party can pay the fee in the mortgage loan transaction, </p><p>and it must be disclosed per RESPA guidelines. Florida Housing must be paid by a lender check or by a check from the title company or closing attorney with the closing package. Upon receipt of the fee and the required documentation, FHFC will issue an MCC to the borrower with a copy sent to the Lender </p><p> Program Participation Fee: $750.00 This one time lender fee is paid by the Lender and </p><p>submitted with the MCC Participation Agreement to FHFC. </p><p>20 </p></li><li><p>WIN-WIN </p><p>LENDER BENEFITS </p><p> The lender offers the homebuyer the benefit of an annual tax credit. </p><p> The lender can use its standard fixed rate mortgage products in </p><p>conjunction with the credit. </p><p> The lender can charge normal and customary fees. </p><p> The lender maintains its servicing rights to the loan. </p><p> MCC product may increase the number of loans produced by the </p><p>lender. </p><p>21 </p><p>HOMEBUYER BENEFITS </p><p> The MCC allows the homebuyer the benefit of a dollar-for-dollar reduction </p><p>of their tax bill in the event income taxes are owed. </p><p> Any remaining mortgage interest can be used to reduce the amount of </p><p>taxable income. </p><p> The MCC can be used to gross up income or qualifying ratios for borrower. </p></li><li><p>HOW TO ACCESS FLORIDA </p><p>HOUSINGS RESERVATION SYSTEM </p><p> After completion of online training you </p><p>will need to request system access via </p><p>email to: </p><p>MCCProgram@floridahousing.org. </p><p>Please allow 48-72 hours for us to </p><p>respond to your email as we anticipate </p><p>a large number of initial requests. </p><p>22 </p><p>mailto:MCCProgram@floridahousing.org</p></li><li><p>HOW TO ACCESS FLORIDA </p><p>HOUSINGS RESERVATION SYSTEM </p><p> Please send us the following information: </p><p> First name: Last name: </p><p> Lending institution: </p><p> Position: (LO, Underwriter, Closer, etc.) </p><p> Date trained: </p><p> Address: City: State: Zip: </p><p> Phone number: Extension: </p><p> Email: This must be the same email address you </p><p>use when you create your system password!!! </p><p>23 </p></li><li><p>HOW TO ACCESS FHFC </p><p>RESERVATION SYSTEM </p><p> Once you receive confirmation from Florida Housing that you can proceed, you will </p><p>access the system and create your password: </p><p> Log in to: www.floridahousing.org/MCC </p><p> Select Lender Portal </p><p> Click: Don't have an account? Click here to register </p><p> 24 </p><p>http://www.floridahousing.org/MCC</p></li><li><p>REGISTER </p><p>Please complete the following information to </p><p>register a new account: </p><p>Full Name: ____________________ </p><p>Email Address: Must be the same as your </p><p>original email request to FL Housing </p><p>Telephone Number: _______________ </p><p>Create a Password: _______________ </p><p>Confirm Password: ________________ </p><p>CLICK: Submit Registration Information </p><p>25 </p></li><li><p>SUCCESS !!! </p><p>New user account successfully created: </p><p> Login with email address and newly </p><p> created password </p><p>26 </p></li><li><p>LENDER PORTAL </p><p> You are now logged into the Florida </p><p>Housing Lender Portal where you can: </p><p>Create a new reservation or update an </p><p>existing one </p><p>Access reference documents including the </p><p>Lender Guide </p><p>Check status of existing reservation </p><p>27 </p></li><li><p>LENDER PORTAL </p><p>28 </p></li><li><p>CREATING A RESERVATION </p><p> Once you click Create a new reservation the </p><p>originator will complete the reservation form by </p><p>either typing in the information or by using the </p><p>dropdowns provided. When finished click Save </p><p>Changes (if not saved, you will need to start </p><p>reservation again when you return to this site). </p><p> If you are missing information or have entered an </p><p>incorrect format, the system will prompt you to </p><p>make the necessary correction before allowing you </p><p>to submit to your underwriter. </p><p>29 </p></li><li><p>CREATING A RESERVATION </p><p>Once corrections are made, click save changes </p><p>once again, go to the Queue status screen and </p><p>click submit to underwriter once again. </p><p>Be sure to print out a Notice to Buyers for your </p><p>borrowers to sign (found in the Reservation </p><p>Forms section of the Queue Status pagr. </p><p>Once the underwriter has received the file, they are </p><p>the only ones who can make changes to the </p><p>reservation unless they return it to the originator to </p><p>make the changes. If correct the queue will show </p><p>Complete in the status column. </p><p>30 </p></li><li><p>WEBSITE NAVIGATION </p><p>QUEUE </p><p>31 </p></li><li><p>SAMPLE RESERVATION </p><p>PAGE </p><p>32 </p></li><li><p>UNDERWRITER </p><p>CERTIFICATION </p><p> Once the underwriter receives the notice in their underwriter </p><p>queue, the underwriter reviews the reservation information and </p><p>supporting documentation and certifies that the borrower meets </p><p>the requirements to receive a MCC. The certification form will </p><p>mostly auto-populate from the reservation page. </p><p> We ask underwriters to manually check off that they have </p><p>reviewed the most current 3 yrs. of tax returns for all parties </p><p>taking title to the home and for spouses (whether a party to the </p><p>loan or not). You will be reviewing the returns looking </p><p>specifically for any mortgage interest deductions which would </p><p>indicate homeownership. This would generally disqualify the </p><p>borrower from receiving a MCC. </p><p> Once completed, the underwriter clicks; submit to closing. </p><p>33 </p></li><li><p>SAMPLE UNDERWRITER </p><p>CERTIFICATION </p><p>34 </p></li><li><p>CLOSER </p><p> When the closer receives notification in </p><p>their queue, the closer will print out the </p><p>following docs to be included in the </p><p>closing package: </p><p> 1) Seller Affidavit </p><p> 2) Borrower/Lender Closing Affidavit </p><p>35 </p></li><li><p>SELLER AFFIDAVIT </p><p>36 </p></li><li><p>BORROWER CLOSING </p><p>AFFIDAVIT </p><p>37 </p></li><li><p>Post Closing-Shipping </p><p> Once closing package is returned to </p><p>lender, post closer/shipper should print a </p><p>MCC Compliance File Checklist found on </p><p>our reservation page under reference </p><p>documents. </p><p> The Compliance file should be assembled </p><p>in a legal size file folder with the </p><p>documents being Acco-Bound as outlined </p><p>on the checklist. 38 </p></li><li><p>Post Closing-Shipping </p><p>The Compliance file should be sent overnight </p><p>or second day (with tracking) to Florida </p><p>Housing a...</p></li></ul>