The Arlington BankThe Arlington Bank2009 Mortgage Credit 2009 Mortgage Credit

Certificate (MCC) Certificate (MCC) ProgramProgram

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History of Federal MCC History of Federal MCC ProgramProgram

• Federal Government program established in 1984Federal Government program established in 1984• MCC Program currently available OhioMCC Program currently available Ohio• 12.5 million in credits available12.5 million in credits available• The Arlington Bank is currently 1 of only 16 approved lenders in The Arlington Bank is currently 1 of only 16 approved lenders in

OhioOhioContact Brent at The Arlington Bank for more informationContact Brent at The Arlington Bank for more information

What’s New with MCCs?What’s New with MCCs? Mortgage interest creditMortgage interest credit Annual tax credit rates:Annual tax credit rates:

– (20%) Credit for non-target areas(20%) Credit for non-target areas– (25%) Credit for target areas(25%) Credit for target areas– (30%) Real estate owned (REO) (30%) Real estate owned (REO) purchasespurchases

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What’s New with MCCs?What’s New with MCCs?What is a Real Estate Owned (REO) What is a Real Estate Owned (REO)

Property?Property?An REO property is a single family An REO property is a single family

property purchased from HUD, property purchased from HUD, Fannie Mae, Freddie Mac, VA or Fannie Mae, Freddie Mac, VA or USDA -RD, or from a financial USDA -RD, or from a financial institution that acquired the property institution that acquired the property through foreclosure.through foreclosure.

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Current GuidelinesCurrent GuidelinesApplicants Must:Applicants Must:Use The Arlington BankUse The Arlington BankQualify under the current Qualify under the current

First-Time Homebuyer First-Time Homebuyer Program guidelinesProgram guidelines

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Current GuidelinesCurrent Guidelines4 categories for Ownership 4 categories for Ownership

status:status:1.1.Actual First time home buyersActual First time home buyers2.2.No ownership in a principal No ownership in a principal

residence in past three yearsresidence in past three years3.3.Buying in a Target areaBuying in a Target area4.4.VeteransVeterans

Current GuidelinesCurrent GuidelinesSale price of home Sale price of home See County income limits hereSee County income limits hereHousehold Income Household Income

– Both are higher in target areasBoth are higher in target areas– Limits vary by countyLimits vary by county

Current GuidelinesCurrent Guidelines Acreage requirements:Acreage requirements:

Acreage limits have changed and Acreage limits have changed and now follow the following guidelines:now follow the following guidelines:•2 acre limit within a municipal 2 acre limit within a municipal

corporationcorporation•5 acre limit outside a municipal 5 acre limit outside a municipal

corporationcorporation

Current GuidelinesCurrent GuidelinesWhat is a Target Area?What is a Target Area?

And And Where are they?Where are they?

Target AreaTarget Area• An economically distressed area as An economically distressed area as

designated by HUDdesignated by HUD• Income and sales price limits are higher in Income and sales price limits are higher in

target areastarget areas• Most counties contain both target and Most counties contain both target and

non-target areasnon-target areas• Do not have to be a first-time homebuyerDo not have to be a first-time homebuyer

Interactive map of Target Interactive map of Target areasareas

• The Arlington Bank can assist you by The Arlington Bank can assist you by clicking hereclicking here

Current GuidelinesCurrent Guidelines• Must use a fixed rate loan productMust use a fixed rate loan product• Must pay a $300 fee at loan closingMust pay a $300 fee at loan closing• Homebuyer education is required and can Homebuyer education is required and can

be completed online and over the phonebe completed online and over the phone• Homebuyer can adjust their W4 for and Homebuyer can adjust their W4 for and

receive more money in their paycheck receive more money in their paycheck every week!every week!

MCC ExerciseMCC Exercise

If a borrower has a loan for a REO If a borrower has a loan for a REO property for $100,000 at 6.5% with a property for $100,000 at 6.5% with a mortgage payment of $632.07 on 360 mortgage payment of $632.07 on 360 month amortization, the first year interest month amortization, the first year interest would be $6,467.09. How much credit would be $6,467.09. How much credit would the borrower be able to claim?would the borrower be able to claim?

AnswerAnswer The borrower would receive a credit The borrower would receive a credit

of $1940.12 for the tax return filed of $1940.12 for the tax return filed for that yearfor that year