Mortgage Credit Certificate New Covenant Church by The Power Is Now Media Inc.

MORTGAGE CREDIT CERTIFICATE TAX CREDIT PROGRAM (MCC) Allow the Government to Pay you to Buy a Home By Eric Lawrence Frazier MBA

NMLS 461807 CAL | BRE 01148434

PRESENTATION DISCLAIMER This presentation is for real estate professionals only and is intended for the exclusive use of licensed real estate and mortgage lending professionals in accordance with local laws and regulations . It is not intended for the general public. Rates and programs are subject to change without notice. The Power is Now Inc. is an Equal Opportunity Employer, Real Estate Broker and Mortgage Broker and does not discriminate against individuals on the basis of race, gender, color, religion, national origin, age, disability, veteran status, or other classification protected in originating loans or providing and real estate services.

PRESENTATION DISCLAIMER The Power Is Now Mortgage Services is a Mortgage Brokerage licensed by the State of California Bureau of Real Estate (license #1980407) and the National Mortgage License System and Registry (license #1435243), and is a division of The Power Is Now Inc. (license # 01980407). The Power Is Now Inc. is not affiliated with any state or federal agency. The Power Is Now Real Estate Services is also licensed by the State of California Bureau of Real Estate (licensed #01980407), and is a division of The Power Is Now Inc. The Power Is Now Inc., is an equal housing lender. Our corporate office is located at 3739 6th Street Riverside, CA 92501. Our Telephone and Fax number is 800-401-8994. Eric Lawrence Frazier MBA, is a California licensed Loan Originator (NMLS license # 461807), and a licensed Real Estate Broker (CA Bureau of Real Estate license #01143484). Restrictions may apply to all loan programs. The Information and/or data is subject to change without notice and is intended for real estate and mortgage professionals only. If you are a consumer please contact us for a loan estimate on fees, charges and APR. All loans are subject to credit approval. The information is not a commitment to lend or extend credit. All loans or products are available in California only. The Power Is Now Mortgage Services and Real Estate Services are divisions of The Power Is Now Inc., and are only licensed to conduct business in the State of California.

THE POWER IS NOW FIRST TIME HOME BUYER LIVE SEMINAR Eric L. Frazier MBA President and CEO CAL BRE 01143485 NMLS 461807 800-401-8994 x 703 The Power Is Now Inc. CAL BRE 1980407 NMLS 1435243

The PowerPoint Presentations Are Available Now http://thepowerisnow.com/events/ Download Mobile App & the flyers on the program you are interested in Get started with your loan application online Tonight Buyers: www.applytobuynow.com Real Estate agents: www.neverleaseagain.com Need help?: www.neverrentagain.com

Eric L. Frazier MBA President and CEO CAL BRE 01143485 NMLS 461807 800-401-8994 x 703 The Power Is Now Inc. CAL BRE 1980407 NMLS 1435243

INTRODUCTION The Power Is Now Inc.  The Power Is Now is a multimedia company has been around since 2009  The Power Is Now Inc. is licensed to sale real estate CAL BRE 1980407

 The Power Is Now Inc. is license to broker mortgage loans NMLS 1435243  Founder and Broker Eric L. Frazier MBA CAL BRE 01143484 & NMLS 461807 As a Mortgage Brokerage, The Power Is Now Mortgage Services has access to many lenders that offer programs for first time homebuyers, move up buyers, investors, churches, non-profits and foreign nationals. We are a full service mortgage brokerage. 10

MISSION The mission of the Power of Now Inc., is to inspire, educate, and empower real estate professionals, and consumers to build wealth through real estate with information, services and support that will give them the power to act now for their future.

VISION The vision of the Power is Now is to be a powerful resource for real estate professionals, and consumers to buy and/or sell real estate to achieve their personal, family and business goals to build wealth and leave an inheritance and legacy for their family.

OUR COMPANY SLOGAN IS OUR NAME The Power Is Now! We are at our best and we maximize our success when we act now.

THE PATHWAY TO POWER AND WEALTH Is To Own Real Estate Now!

THE POWER IS NOW WEALTH INITIATIVE www.neverrentagain.com Building Wealth with Real Estate

THE POWER IS NOW WEALTH INITIATIVE Changing your mindset toward financial literacy and wealth building. www.neverrentagain.com FIVE KEY OBJECTIVES

THE POWER IS NOW WEALTH INITIATIVE • 1.

Five Objectives: Knowledge - Knowledge is the Power you need to build wealth. 

Commitment to Financial Independence – We must take Individual responsibility for our lives. 

Knowledge always comes before money or the money will soon be gone.

Commitment requires disclipine and discipline requires a budget and accountability

Investment in real estate - We must prioritize ownership in real property as opposed to personal property. 

Real Property appreciates. Personal property depreciates.

THE POWER IS NOW WEALTH INITIATIVE 4.

Financial and Credit Management - We must live within our means and not abuse credit.  

Credit is not income - It is a convenience for cash. Good credit is the beginning of building wealth. Good credit is a Fico Score of 720 to 799 higher. Great credit is 800 to 850.

Creating Wealth - We must save money to buy real estate & other assets that appreciate in value.  

Buy and Hold, or Buy, Sell and Buy again and hold - building a legacy of wealth. We must be intentional about leaving a legacy of wealth and an inheritance for our family. 19

10 POINT WEALTH BUILDING PLEDGE www.thepowerisnow.com 20

THE STATE OF HOUSING ON THE DECLINE FOR AFRICAN AMERICANS 21

Research Study on the Wealth Gap Brandeis University Institute of Asset and social Policy

RESEARCH AND POLICY BRIEF FEBRUARY 2013 The Roots of the Widening Racial Wealth Gap: Explaining the Black-White Economic Divide

Authored by: Thomas Shapiro Tatjana Meschede Sam Osoro 22

RESEARCH STUDY ON THE WEALTH GAP Data for this analysis was derived from the Panel Study of Income Dynamics (PSID), a nationally representative longitudinal study that began in 1968. They followed nearly 1,700 working-age households from 1984 through 2009.

RESEARCH STUDY ON THE WEALTH GAP â&#x2014;? The goal of the study was to examine the effect of policy and institutional decision-making on how average families accumulate wealth.

â&#x2014;? There was a insufficient number of Latino, Asian American, or immigrant households to include in this report but the results can be applied across communities of color.

MEDIAN WEALTH In 2009, a representative survey of American household revealed That the median wealth of: White families - $113,149 Latino families- $6,325 Black families - $5,677 The Gross Domestic Product of African American is 1.3 Trillion dollars and 1.5 Trillion dollars for Hispanics. Why is the median wealth so low? 25

YOUR POWER IS NOW TO BUILD WEALTH You're not building wealth if you use all your money for consumption. The GDP of African American is 1.3 Trillion dollars (13 out of 182 countries) The GDP for Hispanics is 1.5 Trillion dollars (10 out of 182 countries)

GREAT RECESSION AND GREAT GAP The Wealth Gap Research Report Traced the same 1700 families over a 25-year period (1984-2009) and found that the total wealth gap between White and African-American families nearly tripled, increasing from:

â&#x20AC;˘ $85,000 in 1984 to $236,500 in 2009

The Wealth Gap: $152,000 and growing 27

THE STATE OF HOUSING FOR MINORITIES •

The Black/Brown-White Economic Divide Real

•

African American and Hispanic communities were hit the hardest by the Great Financial Crises from 2007 to 2009

•

They have the farthest to climb to get back into the home ownership before home values get back to their pre-recession prices.

•

It may be too late for many because interest rates will be rising and home prices are increasing now.

1994 Blacks & Hispanic Homeownership Rates: 40 & 42% respectively. 2004 Blacks achieved a high of 50% 2014 Blacks were at 42.5% and Hispanics 43.5% Hispanics. 29

LESSONS LEARNED - GREAT FINANCIAL CRISIS 1. We must save money – Make it your #1 priority now and not later. 2. We must live on a budget – Do not live by hope & faith and beyond your means 3. We must establish an emergency fund – Plan for the worse & expect emergencies.

LESSONS LEARNED - GREAT FINANCIAL CRISIS 4. We must stop long term financing vehicles - Pay cash or limit financing to 12 mos. 5. We must become debt free – Save your money to buy what you want. Stop begging for what you need. 6. We must buy real property – Buy house before you buy an expensive personal property or car.

THE STATE OF HOUSING FOR MINORITIES â&#x20AC;¢

The homeownership rate in the U.S. is 63.5 percent overall. The rate among whites is 72.2%, Asians, 56.6%, Hispanic 46.3%, African Americans 41.7%

https://www.census.gov/housing/hvs/files/currenthvspress.pdf

THE STATE OF HOUSING BY AGE â&#x20AC;¢

The homeownership rate by Age of Householder. Under 35 - 34.7 percent, 35 to 44 - 58.7 percent, 45 to 54 - 69.8 percent, 55 to 64 - 74.8 percent, 65 and over - 79.5 percent.

THE STATE OF HOUSING FOR MINORITIES •

If homeownership continues to be the primary vehicle that Minorities use to create wealth then Minorities are on the path to another Economic Crisis and homelessness!

•

It’s time to take action and personal responsibility and build wealth.

WEALTH IS THE DIFFERENCE Wealth provides a measure of security when a job loss or personal crisis occurs.

Great Recession further exacerbated the wealth gap as Blacks and Latinos disproportionally impacted by the bursting of the housing bubble. Between 2007 and 2010, the average Black and Latino households lost three and four times more wealth, respectively, than the average White household.

Extrapolating from past trends, we can estimate what the future of wealth inequality will look like in this country. Unfortunately, it doesnâ&#x20AC;&#x2122;t look good.

WHY ARE WE BEHIND? •Number 1. We were brought here as slaves in 1619 in Jamestown Virginia to aid in the production of tobacco & cotton crops. •After 238 years of degradation and abuse the legal case of Dred Scott v. Sandford – 1857. The Supreme Court said that Blacks were not citizens under the Constitution and therefore were not entitled to rights and privileges it promises. 40

WHY ARE WE BEHIND? •Number 2. The emancipation proclamation and the 13th amendment that passed the Senate April 8th, 1864 and House Jan. 31, 1865. •Should have made things better for blacks but life became even worse. Some slaves stay on the plantation for protection because freedom meant giving up their lives. •Lynchings and beatings and house burnings were common placed and accepted by society. 41

WHY ARE WE BEHIND? •Number 3. We can never forget the constitution did not view Blacks as citizen until 1866. The Civil Rights Act of 1866 made blacks full U.S. citizens (and this repealed the Dred Scott decision). •In 1868, the 14th amendment granted full U.S. citizenship to African-Americans. •The 15th amendment, ratified in 1870, extended the right to vote to black males. We have only had the right to vote for 147 years. 42

WHY ARE WE BEHIND? â&#x20AC;˘Number 4, we can never forget the Louisiana General Assembly passed a law in 1890 to prevent black and white people from riding together on railroads. In 1896 Plessy vs. Ferguson, a case challenging the law, the U.S. Supreme Court upheld the law. â&#x20AC;˘The courts decision was the catalyst to make all public facilities to be separate and unequal throughout the South.

WHY ARE WE BEHIND? â&#x20AC;˘Two years later 1898 the Supreme Court upheld a Mississippi law designed to deny black men to vote. The South then limited the voting rights to those who owned property and other arbitrary and subjective rules. â&#x20AC;˘In South Carolina, black and white workers could not work in the same room or come in the same door in many industries. 44

WHY ARE WE BEHIND? •In 1914 Texas had six entire towns in which blacks could not live. •Mobile passed a Jim Crow curfew where Blacks could not leave their homes after 10pm. •These and many other laws were the precursor to separate but unequal in every aspect of black life: separate bathrooms, water fountains, schools, theaters, hospitals, restaurants, parks and even entertainment venues. 45

WHY ARE WE BEHIND? •Number 5, we must never forget that more than 360,000 black men served in World War I. •The country welcomed them home with 25 major race riots, the most serious in Chicago. White mobs lynched veterans in uniform. Black Americans fought back. •The National Association for the Advancement of Colored People, founded in 1909, and the Urban League publicized abuses and worked for redress which has never been fully realized. 46

WHY ARE WE BEHIND? â&#x20AC;˘Title VI of the Civil Rights Act of 1964 prohibits discrimination based on race, color, or national origin in programs and activities receiving federal financial assistance. â&#x20AC;˘Title VIII of the Civil Rights Act of 1968 (Fair Housing Act), as amended, prohibits discrimination in the sale, rental, and financing of dwellings, and in other housing-related transactions, on the basis of race, color, national origin, religion, sex, familial status (including children under the age of 18 living with parents or legal custodians, pregnant women, and people securing custody of children under the age of 18), and disability. 47

WHY ARE WE BEHIND? â&#x20AC;˘We have the lowest rate of homeownership 41.7% to compared to Latinos at 46.3% and whites at 72.2% â&#x20AC;˘We have the highest unemployment rate of 8.1% compared to Latino at 5.6% and whites at 4.1%.

WHY ARE WE BEHIND? •The black tradition family is under stress: 71% of births outside of marriage is to black woman compared to 29% of births to white women. In 1970, 38% of all births to black women occurred outside of marriage. 50% of black children are being raised by a single parent as opposed to 19% among whites. In 1970 35% of children where living with a black parent as opposed to 10% of white families. •We have highest level of high school drop outs, sexually transmitted disease and the highest black on black crime than any other ethnic group in addition to the highest level of incarnation of black men of any other ethnic group. •This is where we are. Today 2017. 49

WHY ARE WE BEHIND? •Every freedom we enjoy today has been paid for by blood. It has been a fight for freedom for African American from our capture in Africa, the middle passage unto the day we step foot on American soil had to survive in country among people who viewed us as less than human. •In spite of these things: We are 12% of the population, born out of slavery, poverty and our homeowner ship is on its way to 50% •We are 12% of the population and our GDP 1.3 Trillion 13 out of 182 Countries. 50

WHY ARE WE BEHIND? â&#x20AC;˘We are only 12% of the population and we leaders in sports & entertainment, business, science, medicine, education, law, engineering, computers, software development, and have achieve the highest office in the land.

Can we buy a home? Of course we can!!! 51

How do we close the Gap?

THE POWER IS NOW MORTGAGE SERVICES •FHA/VA Home Loan Program •FHA/VA Loan Limits •Multi Unit Strategy •1% Down Payment Conventional Mortgage

•Help Down Payment Assistant Program

THE POWER IS NOW MORTGAGE SERVICES •The Federal Housing Administration (FHA) was created as part of the National Housing Act of 1934 in response to the struggling housing industry following the Great Depression. •Before its creation, only 40% of Americans were homeowners. This low homeownership rate was largely due to the limited short-term financing available, •Most loans were offered with three to five-year payment plans and required large down payments often consisting of 50% of the purchase price. •Only the very wealthy were able to purchase a home. 55

THE POWER IS NOW MORTGAGE SERVICES â&#x20AC;˘The FHA's ability to assume the lender's risk allowed home loans to be spread out over longer terms, resulting lower monthly payments and greater access to mortgage funds. â&#x20AC;˘The FHA established two mortgage insurance programs; one for one-to-four-unit single-family residences (SFRs) and one for multifamily housing units. In 1965, the FHA became part of the U.S. Department of Housing and Urban Development (HUD).

THE POWER IS NOW MORTGAGE SERVICES â&#x20AC;˘The FHA is a government agency, however its funding is selfgenerated. It has insured over 34 million home mortgages and over 47,000 multifamily projects since its inception. â&#x20AC;˘Mortgage Insurance premiums fund the program

2017 MORTGAGE LIMITS FHA INSURED LOANS

FHA AREA BETWEEN FLOOR & CEILING

FHA AREAS AT CEILING â&#x20AC;&#x201C; 2017

FHA 203B •

Down Payment: – 10% down payment 500 to 579 FICO – 3.5% down payment 580 +

•

Minimum Credit Scores: – Minimum Credit scores 500+ – Non-traditional Trade line – Allowed – 3 years seasoning on Foreclosure, Shortsale and Bankruptcy. – Do NOT need to be a first time homebuyer (unless you are combining with an MCC – CA only – One Unit only) - No counseling classes needed.

•

Back to Work Program: – 12 months seasoning on Foreclosure, Short Sales and Bankruptcy. 61

FHA 203 B • Max Debt Ratio: Debt Ratio determined by AUS/DU Approved/Eligible No DR Max with AUS approval DU – Refer/Eligible: Housing ratio 31% Total Debt Ratio 43% 1 to 3 month reserves may be required if AUS/DU approval is not granted – No reserves requirement on DU approved loans • AUS/DU Defined: Fannie Mae’s Desktop Underwriter. An automated underwriting system or decision engine that approves loans or refers them an underwriter for approval or denial – – – –

FHA 203 B • Property Types: – OWNER OCCUPIED ONLY. – 1 to 4 Units properties – Condominiums/Town Homes/PUD – FHA approved. – SFR – Fixer Upper - 203k LOAN.

VA HOME LOAN The original Servicemenâ&#x20AC;&#x2122;s Readjustment Act, passed by the United States Congress in 1944, extended a wide variety of benefits to eligible veterans. â&#x20AC;&#x201C; Under the law, as amended, the VA is authorized to guarantee or insure home, farm, and business loans made to veterans by lending institutions. 64

VA HOME LOAN • Big Opportunity – Over the history of the program, 18 million VA home loans have been insured by the government. – Currently there are 22 million veterans and only 2 million loan in servicing. 65

VA LOAN LIMITS VA's 2017 Loan Limits are the same as the Federal Housing Finance Agency's limits 2017 Loan Limits (Effective January 1, 2017). For purposes of determining the VA guaranty, lenders are instructed to reference only the One-Unit Limit column in the FHFA (Federal Housing Finance Agency) Table â&#x20AC;&#x153;Fannie Mae and Freddie Mac Maximum Loan Limits for Mortgages Acquired in Calendar Year 2017 and Originated after 10/1/2011 or before 7/1/2007â&#x20AC;?.

VA LOAN LIMITS VA does not set a cap on how much you can borrow to finance your home. The loan limits are the amount a qualified Veteran with full entitlement may be able to borrow without making a down payment and vary by county, since the value of a house depends in part on its location. The basic entitlement available to each eligible Veteran is $36,000. Lenders will generally loan up to 4 times a Veteran's available entitlement without a down payment, provided the Veteran is income and credit qualified and the property appraises for the asking price.

VA HOME LOAN • Purchase/Refinance/Construction 1 to 4 Units – VA loans may be used to finance the purchase or construction of a one- to four-unit residence. – Can’t be used for investor loans. – Veteran must occupy home.

VA HOME LOAN • Features and Benefits – – – – – – –

No down payment required (100% financing). No maximum loan amount set by VA. No maximum income limits. Less stringent qualifying standards. Can be fixed-rate loan or ARM. No mortgage insurance required. No reserves after closing required. 71

VA HOME LOAN • Features and Benefits – Lender may charge flat fee of no more than 1% of amount financed to cover cost of making loan. – No prepayment penalties. – Can be assumed by creditworthy buyer, veteran or non-veteran. – Forbearance extended to veterans in financial difficulties.

VA HOME LOAN • No Mortgage Insurance – Instead of mortgage insurance premiums, VA borrowers must pay VA a funding fee to defray administrative costs of loan program. – Funding fee is percentage of loan amount. – Can be paid at closing or financed.

VA HOME LOAN • VA Funding Fee - First Time Use Down Payment – Less than 5%* – 5% to 9.99% – 10% or more

Veteran/Active Duty 2.15% 1.50% 1.25%

Reservist/Nat. Guard 2.40% 1.75% 1.50%

VA HOME LOAN • VA Funding Fee - Second Time Use Down Payment – Less than 5%* – 5% to 9.99% – 10% or more

Veteran/Active Duty 3.30% 1.50% 1.25%

Reservist/Nat. Guard 3.30% 1.75% 1.50%

VA HOME LOAN • VA Streamline Refinance / IRRL (interest Rate Reduction Refinance Loan) Type of Loan – 1st Time Use – 2nd Time Use

Veteran/Active Duty 0.50% 0.50%

Reservist/Nat. Guard 0.50% 0.50%

VA HOME LOAN FUNDING FEE • Exempt from funding fee requirement: • Veterans entitled to receive VA compensation for service-related disabilities. • Surviving spouses of veterans who died in service or from servicerelated disabilities.

VA HOME LOAN ELIGIBILITY • Eligibility for VA loans is based on length of active duty service in U.S. armed forces. • Honorably discharged veterans who served: • • • • • •

2 years on active duty 6 years in the Reserve/National guard POW’s held in captivity for 90 days of more 90 days of wartime duty when called up or ordered under U.S.C. Title 10 (this US code must appear on DD214). 181 days of peacetime duty called up under U.S.C. Title 10 Some unmarried surviving spouses 78

VA HOME LOAN CERTIFICATE OF ELIGIBILITY • Obtaining your COE • VA Form 26-1880 • Proof of service documentation (DD214, active duty statement of service or Reserve/National Guard points statement) • If veteran had previous VA home that was sold, a copy of the HUD1 Settlement Statement

VA has an automated system used by lenders to obtain an online certificate of eligibility 79

MORTGAGE CREDIT CERTIFICATE TAX CREDIT PROGRAM (MCC) Allow the Government to Pay you to Buy a Home

GOVERNMENT HOMEOWNERSHIP INITIATIVE • The government doesn’t want homeownership to be something only the rich can achieve. • This is why there are programs in place to make buying a home more accessible to low-and middle-income families. • The MCC Program is one such program.

GOVERNMENT HOMEOWNERSHIP INITIATIVE â&#x20AC;˘ Low-and middle-income families who want to buy homes may be able to get a Government bond loan. â&#x20AC;˘ Bond loans are issued by state and local authorities and subsidize the cost of becoming a homeowner for those who meet certain income requirements, either by lowering interest rates or offering cash assistance.

GOVERNMENT HOMEOWNERSHIP INITIATIVE â&#x20AC;¢ States and Municipalities can issue mortgage credit certificates (MCCs in place of, or as part of, their authority to issue mortgage revenue bonds.

WHAT IS A MORTGAGE REVENUE BOND? â&#x20AC;˘ A mortgage revenue bonds is like any other type of government bond in that they have a maturity date and an interest rate. Investors who buy the bonds receive regular interest payments that are tax-exempt. â&#x20AC;˘ A state or local government may decide to sell mortgage revenue bonds to raise money for programs that subsidize the cost of buying a home.

WHAT IS A MORTGAGE REVENUE BOND? • The government uses the money raised from the sale of mortgage revenue bonds to lower the cost of buying a home for community members who otherwise might not be able to afford it. • Because they’re partially backed by mortgages, bond loans are also known as mortgage revenue bond loans.

MORTGAGE REVENUE BOND ARE IMPORTANT • The government can say to a bank or other lender, • “Please make x number of home loans available to people with y income and we will partially back those loans with our government money.” • Lenders who might otherwise have declined to offer loans to lowand middle-income applicants will take the government backing and extend home loans to low to moderate income applicants. • With out bonds and other subsidies the rate of homeownership will continue to fall for minorities.

MORTGAGE CREDIT CERTIFICATE – TAX CREDIT PROGRAM • The MCC Tax Credit Program is a federal credit which can reduce potential federal income tax liability, creating additional net spendable income which borrowers may use toward their monthly mortgage payment.

• This MCC Tax Credit program enables first-time homebuyers to convert a portion of their annual mortgage interest into a direct dollar for dollar tax credit on their U.S. individual income tax returns.

HERE IS HOW IT WORKS â&#x20AC;˘ MCCs enable an eligible first-time homebuyer to obtain a mortgage secured by his or her principal residence and to claim a federal tax credit of 20% of the mortgage interest payments.

HERE IS HOW IT WORKS FUTURE Purchase Purchase Price Down Payment Loan Amount Upfront MI Total Loan Amt. Interest Rate/APR Principal and Interest Taxes Home Ins. Mortgage Ins. Total Payment PITI

Cash Requried to Closed: Down payment Closing cost Total Down 3 Months PITIMI Reserves Total Cash Required to Close: Lenders Interest Credit Seller Credit Total Credit Total Cash Required

1 unit 0.035 0.0175 Rate: 4.25% 0.0125 0.0035 0.0085

$ 439,000.00 $ 15,365.00 $ 423,635.00 $ 7,413.61 $ 431,048.61 APR: 5.798% $ 2,121.00 $ 457.29 $ 128.04 $ 300.07 $ 3,006.41

3.50% $ 15,365.00 4% $ 17,560.00 $ 32,925.00 $ $ 32,925.00 -2% $ (8,780.00) -2.00% $ (8,780.00) $ (17,560.00) $ 15,365.00

MCC Credit Calculation Loan Amount Note Rate: Total Interest MCC Tax % MCC Tax Credit 12 months Mo. Tax Credit

$ $

431,048.00 4.25% 18,319.54 20% 3663.908 12 305.33

Total Payment PITI Mo. Tax Credit Benefit Mortgage Payment after Tax

$ $ $

3,006.41 305.33 2,701.08

2017 Personal Income Taxes Due: MCC Tax Credit Federal Tax Due

$ $

3,663.90 3,663.90 ZERO

MCC TAX CREDIT BENEFITS • Tax Credit can roll forward three years. • For Example: If your tax credit is 3,000. You have 3 years to use it if you have no tax liability. $9,000 in total tax credit is saved but at the end the 3rd year it is gone. • Talk with your CPA and make sure you are maximizing the benefit. Increase withholdings and tax home more income. • The tax benefit never expires. As long as you own the home you get the benefit.

MCC TAX CREDIT BENEFITS • What if you sell your home? • Recapture Tax: • Three things need to happen to owe a recapture tax? • 1. Sell within 9 years • 2. Gain on the sale • 3. Your income has to increase 5% over the income limits every year. • Make 40k but income limit is 60k your income had to increase 5% a year over the income limit for the county. • All three of things have to happen or the recapture does not apply.

• Doesn’t apply to most people.

ELIGIBILITY REQUIREMENTS • Eligibility requirements for all CalHFA programs: • You must be a U.S. citizen, permanent resident or other qualified alien. • You will need to meet credit, income limits and loan requirements of the CalHFA-approved lender and the mortgage insurer. • You will need to live in the home you are purchasing for the entire term of the loan, or until the home is sold or refinanced. • CalHFA borrowers must complete homebuyer education counseling and obtain a certificate of completion through an eligible homebuyer counseling organization. • CalHFA's down payment programs MCC require that you to be a first-time homebuyer.

FIRST TIME HOME BUYERS ONLY â&#x20AC;˘ If you've never owned a home, you're a first-time homebuyer. It also means that if you owned your home three or more years ago, but sold it, you are right back to being a first-time homebuyer again.

HOMEBUYER EDUCATION REQUIREMENT • CalHFA firmly believes that homebuyer education is critical to the success and happiness of a homeowner • CalHFA will accept hard or online copies of homebuyer education counseling certificates. • Who has to take this Homebuyer Education course? • Only one occupying first-time borrower on each loan transaction.

• How do I take this education course?

• ONLINE: You can take eHome's eight-hour Homebuyer Education course online • Cost: (fee: $50) • Webstie: https://www.ehomeamerica.org/calhfa

eHome America Education Administrators : support@ehomenetwork.org 844-243-4663 500 Capitol Mall, Suite 1400 Sacramento, California 95814 Phone: 844-243-4663 Email:support@ehomenetwork.org Website: http://www.calhfa.ca.gov IN-PERSON: face-to-face Homebuyer Education through NID, Springboard, NeighborWorks America or any HUD-Approved Housing Counseling Agency (fee: varies by agency)

CALHFA – FHA & CONVENTIONAL PROGRAM • Borrower Requirements: • Occupy the property as a primary residence; non-occupant coborrowers are not allowed. • CalHFA borrowers must complete homebuyer education counseling and obtain a certificate of completion through an eligible homebuyer counseling organization. • Middle Credit Score: 640 • Max. DITI: 45% • Max. LTV 97% CLTV 105% • Meet CalHFA income limits for this program.

PROPERTY REQUIREMENTS • Sales price of the home cannot exceed CalHFA's sales price limits established for the county in which the property is located • Be a single-family, one-unit residence, including approved condominium/PUDs • Guest houses, granny units and in-law quarters may be eligible

ADDITIONAL PROPERTY GUIDELINES • Condominiums must meet the guidelines of the first mortgage • Manufactured housing is not permitted • There is a five acre maximum on the size of the property • Leaseholds/Land Trusts and Co-ops are not permitted • Meet the requirements of the mortgage insurer/guarantor

ELIGIBLE COUNTIES • The CalHFA MCC Tax Credit program will be available in all areas where an MCC is not currently available through a CalHFA partnering county at the time the loan is originated. • Find out if the CalHFA MCC program is available in your area by viewing this MCC County Resource List.

CALHFA MCC PROGRAM MCC COUNTY RESOURCE LIST

2016 MCC RESOURCE FOR CALHFA

CALHFA MCC PROGRAM 2016 SALES PRICE LIMITS

FEDERALLY DESIGNATED TARGETED AREAS • What is a Targeted Area? • Areas that are "targeted" by the Federal Government were identified in the 2010 Census as areas in California where 70 percent of the families who live there earn an income that is 80 percent or less than the statewide median income. • Forty-five (45) of California's 58 counties have targeted areas - with 37 percent of the areas located in Los Angeles County. • While cities, counties and other governmental agencies may also have specific areas in their jurisdiction "targeted" for other program purposes, only those census tracts identified by the Federal Government as "targeted" are used for CalHFA's purposes, as it relates to a waiver of the first-time homebuyer requirement on the MCC program, sales price limits and certain income limits

CALHFA MCC PROGRAM FHA 2016 INCOME LIMITS

CALHFA MCC PROGRAM CONVENTIONAL 2016 INCOME LIMITS

Eric L. Frazier MBA President and CEO CAL BRE 01143485 NMLS 461807 800-401-8994 x 703 The Power Is Now Inc. CAL BRE 1980407 NMLS 1435243

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