City Council
MEETING DATE: 1/13/2016
TITLE:
Title
Participation in the Riverside County Mortgage Credit Certificate Program
End
FROM:
Tami Scott, Administrative Services Director
RECOMMENDATION:
Recommendation
Approve a Resolution authorizing the City of Cathedral City to participate in the Riverside County Mortgage Credit Certificate Program
Body
BACKGROUND:
A Mortgage Credit Certificate (MCC) entitles qualified home buyers to reduce the amount of their federal income tax liability by an amount equal to 20% of the mortgage interest paid during the year on their primary mortgage loan. The advantages to the home buyer include:
The home buyer's federal income tax liability is directly reduced by the amount of the tax credit;
Home buyers can qualify more easily for their primary mortgage loan-lenders may factor in the tax credit when underwriting the loan application, which may allow the borrower to (i) qualify for a larger loan amount, or (ii) improve the borrower's qualifying debt ratios.
If the amount of the MCC exceeds the homebuyer's tax liability, the unused portion of the credit can be carried forward to the next three years or until used, whichever comes first.
DISCUSSION:
Homebuyer Eligibility Criteria
There are three basic criteria for determining a home buyer's eligibility for the MCC tax credits:
1. The borrower must be a first time Home Buyer defined as a person who has not had an ownership interest in improved-upon residential real property for the previous three (3) years.
2. The borrower's annual income must fall within the program limits as follows:
?Max Income Outside Target Area1
?Household w/ 1-2 persons: $69,700
?Household w/ 3+ persons: $80,155
?Max Income Inside Target Area
?Household w/ 1-2 persons: $83,640
?Household w/ 3+ persons: $97,580
3. The home being purchased must fall within the program purchase price limits as follows:
?Max Home Purchase Pric...
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