# mcc lite

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Category: Education

## Presentation Description

MCC Mortgage Credit Certificate Intro

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## Presentation Transcript

### Mortgage Credit Certificate (MCC)20% Tax Credit :

Mortgage Credit Certificate (MCC)20% Tax Credit

### What Is An MCC? :

What Is An MCC? Is like a 20% off coupon but in is not a coupon it is a certificate worth 20% of all the interest paid on your loan and it come in the form of tax credits. Tax Credits are a dollar-for-dollar reduction of the total federal income tax a borrower pays ! The Credit for 20% of your interest paid lasts for the life of the loan.

### How Does It Work? (FHA) :

How Does It Work? (FHA) Sales Price \$ 375,000 Down Payment 3.5% \$ -13,125 Base loan Amount (5% 30year fixed) \$ 361,875 Total Loan w/ UF Mortgage Ins \$ 368,207 Interest Paid Annually @ 5% \$ 18,410 20% of Annual Interest \$ 3,682

### How Does it work? :

How Does it work? 20% of Annual Interest \$ 3682.07 Divide by 12 months in a year 1/12 = ? Monthly benefit to buyer \$306.83 A first time buyer would receive a monthly tax benefit of \$306.83 dollars a month to offset the cost of the home.

### How Does it work? :

How Does it work? Payment W/O MCC Payment with MCC This is the qualifying payment Guild can use to qualify the borrower!

### Slide 6:

Maximum DU Loan Approval without the MCC. = \$340,000.00

### Slide 7:

Maximum DU Loan Approval With …….the MCC! = \$395,000.00 That’s an increase of * \$55,000.00!

### Slide 8:

Based on the MCC the payment or PITI reduced by the amount of \$321.24

### FHA loan @5% and sales price of 375K@ Total potential saving up to. :

FHA loan @5% and sales price of 375K@ Total potential saving up to. 20% of 394,335.86 = \$78,867.17 \$78,867.17

### Slide 10:

Entitlement Review 206-455-0995