Getting a 100 Home Loan with Fair Bad or no Credit

MCC: How San Diego’s First Time Homebuyer Program Can Get You Your First Home

San Diego’s real estate market is one of the premier housing markets in the country. Even with the recent downturn in the housing market and rise in foreclosures, property values and the cost of buying a home continue to put the dream of home ownership out of the reach of many first-time home buyers in San Diego. One program, however: the Mortgage Credit Certificate, or MCC, is tailored to help more first-time home buyers purchase condominiums or houses in San Diego county.

The MCC is a special Federal Income Tax Credit program, that is issued by San Diego County. It not only serves to automatically increase the home loan amount you can qualify for, but also increases your take home pay. What’s more, it will then help keep your home mortgage affordable by decreasing federal income taxes each year that you live in the home.

The credit amounts to 15-20% of the mortgage interest that you pay each year on your federal taxes. The tax credit entitles you to subtract the amount of the tax credit from your total federal income tax liability, and receive a dollar for dollar savings. The tax deduction is subtracted from your gross income before your federal income taxes are calculated.

MCC Program Limits: How Can You Qualify?

You must be a first-time homebuyer – you should not have owned a principal residence within the last 3 years.
Your household income should not exceed the limits that are shown below.
You must occupy the purchased home as a principle residence.
You have to apply for the MCC through a participating Lender,
You have to pay a non-refundable application fee of .002 X the home loan amount. (Example: a $250,000 home loan X .002 = $500 fee)
You must purchase a single-family home – detached house, townhouse or condominium

MCC Program Maximum Income Limits

1-2 persons: $83,300
3+ persons: $97,160

MCC Eligible Properties
This tax credit can only be applied to either new or previously occupied single-family homes. The properties must be single-family homes, including detached houses, half-plexes, condominium and owner occupied duplexes. Triplexes, or four-plexes do not qualify as eligible homes for the MCC program
There are also purchase price limits in the program:

MCC Program Maximum Purchase Price Limits

*Non-targeted areas
Re-sale: $503,700
New: $490,000

*Targeted areas
Re-sale: $615,700
New: $598,900

MCC Eligible Mortgage Loans

The MCC can only be used with conventional, fixed-rate or adjustable rate home loans, FHA or VA loans. It cannot be used with any bond-backed home loans such as California Housing Finance Agency (CHFA) or Cal Vet loans. The San Diego MCC Program does not underwrite the mortgage loans, but rather provides a tax credit to help first-time hme buyers qualify for them.

MCC Eligible jurisdictions:

These are the areas that participate in the MCC program: Carlsbad, Coronado, El Cajon, Encinitas, Escondido, Imperial Beach, Lemon Grove, National City, Poway, San Marcos, Santee, Unincorporated Areas Vista

How To Apply for the MCC

The very first step is to find a Program Lender enrolled in the MCC program. This is because your lender, not you, will apply for the MCC credit.

NOTE: Not all lenders will be willing to deal with the paperwork involved in the MCC. Some unscrupulous lenders will even attempt to talk you out of it. However, if you are eligible, you must insist on it or find yourself another lender

You will find a list of San Diego MCC Program lenders at this link

When you find a Lender enrolled in the MCC program, get pre-approved for your primary mortgage financing. this lender will also pre-qualify you for an MCC.
Once you find a property and the seller accepts your offer, escrow will be opened
Your lender will prepare and submit your MCC application to the program office.
Once your application is approved, the program office will issue your lender an MCC Closing Affidavit.
At the closing of escrow, you will sign this Affidavit along with the other closing documents.
You will receive your MCC document by mail within 30 days after escrow closes.

You may file a new W-4 with your employer to reflect the MCC tax credit savings. By doing so, the number of your tax exemptions would increase and thus reduce the amount in tax that is withheld. This immediately increases your take home paycheck. You also have the option of waiting till the end pf the year, and realizing the tax credit savings in one lump sum when you file your federal income tax return.

Here are more useful links: