County of Orange Mortgage Credit Certificate - 2011

[sgip]

The County of Orange's Mortgage Credit Certificate has been re-authorized for 2011 purchases. It's a 15% of your annual interest paid tax credit for as long as you owner occupy your home.

2011 County of Orange MCC guidelines as of 1/25/2011 - subject to change without notice.

Available throughout the County of Orange, with the exception of the cities of Costa Mesa and Stanton.

Targeted Census Areas 74403, 74405, 74406, 74902, 75002, 75003, 75004, 89104.

Primary residence, purchase only.

Purchase price limits: $701,410 Target Areas (New or Existing homes)
Purchase price limits: $573,881 Non-Target Areas (New or Existing homes)

Homebuyer Eligibility: Persons who have not owned a "Principal Residence" within the past three (3) years. Requirements waived in designated Target Census areas.

Income Limits (Based on Household Income) $111,480 - 2 or less person household (Targeted or Non-Targeted Areas)
Income Limits (Based on Household Income) $130,060 - 3 or more persons household (Targeted or Non-Targeted Areas)

MCC Application Fee: $350. Non-refundable, may be paid by Borrower, Lender, or Seller.

The recapture tax information is the same as the 2010 version of the MCC. Send a PM if you'd like more information on how recapture taxation works. It's not much of a boogyman since 99% of all MCC's never get struck by recapture, however you may be that lucky 1% that does so disclosures are in order.

My .02c

Soylent Green Is People

 

[freedomcm]

wow, i must be out of it.  never heard of this program.  how old is it?

from wiki:
The amount of mortgage credit allowed varies depending on the state or local government that issues the certificates, but is capped at a maximum of $2000 per year by the IRS. As an example, if a homebuyer were to receive an MCC that offers a 30% credit on a $200,000 loan for 30 years with a rate of 6%, the allowable tax credit would be figured as follows (all numbers rounded):
Mortgage Interest Paid (1st Year): $11,933
x MCC Credit: 30%
= Total Credit: $3579
Because the total credit in this example exceeds the IRS limit of $2000, the homebuyer would report a $2000 credit on their tax return. The buyer may continue to receive a tax credit for as long as they live in the home and retain the mortgage.

from IRS:
You must contact the appropriate government agency about getting an MCC before you get a mortgage and buy your home. Contact your state or local housing finance agency for information about the availability of MCCs in your area.
How to claim the credit.  To claim the credit, complete Form 8396 and attach it to your Form 1040. Include the credit in your total for Form 1040, line 53; be sure to check box c and write ?Form 8396? on that line.
Reducing your home mortgage interest deduction.  If you itemize your deductions on Schedule A (Form 1040), you must reduce your home mortgage interest deduction by the amount of the mortgage interest credit shown on Form 8396, line 3. You must do this even if part of that amount is to be carried forward to 2011.
Selling your home.  If you purchase a home after 1990 using an MCC, and you sell that home within 9 years, you may have to recapture (repay) all or part of the benefit you received from the MCC program.

 

[sgip]

MCC's have been around for some time.

As for the recapture tax, you have to first see your income essentially skyrocket compared to when you took out the MCC, you'd have to sell in year 5 (the highest recapture percentage during the 9 year period), you'd have to have a gain on the sale, net expenses, and even then your "worst case scenario" is 1/2 of the net gain being paid to the County. Could it happen? Sure. Might it happen... meh.

My .02c

Soylent Green Is People

 

[navinarayanan]

Do you have a document or link to the information so we can send it to our lenders ?
The only link I found was to ahahousing.com which does not reflect the changes for 2011.

 

[sgip]

Why not send your business to someone already working with the program? 

The manager of the program is at nhfloan.org. All the information is there. It takes time and training to sign up to become an MCC provider. By the time you get to it, it might be already fully reserved.

My .02c

Soylent Green Is People.

 

[sgip]

Most of these are in the central Santa Ana area.... Think the 5 at the top, South from 17th to about Dyer, and East to the Santa Ana River, those neighborhoods.

Tract 74405 is where some new construction loft style homes were built. There may also be some of the rehabbed homes in the downtown area that qualify.