Frequently Asked Questions (FAQs)
The following information explains in more detail some of the most frequently asked questions (FAQs) from homeowners regarding the GSFA MCC Program (formerly known as the GSFA MCC Program.
If you have questions not addressed below, please feel free to Contact Us.
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Applications are accepted on a first-come, first-serve basis through GSFA MCC Participating Lenders only. The Lender will submit the homebuyer's MCC application directly to GSFA.
When the Lender submits the application to GSFA, they also reserve the GSFA MCC funds through the Program Manager's Online Reservation System. This reservation will hold the MCC while the lender is processing the mortgage loan application. The Program Manager then processes the GSFA MCC Application and, once approved, will issue a GSFA MCC Commitment to the Lender. The Lender then finishes processing and closing the mortgage loan.
After the mortgage loan closes, the Lender will submit a GSFA MCC Closing Package with the applicable fee to the Program Manager for review. Once the MCC Closing Package is reviewed and approved, the Program Manager will issue the physical Mortgage Credit Certificate to the homebuyer. Once the homebuyer receives this document, they may start benefiting from the MCC.
A mortgage interest deduction differs from a mortgage tax credit in a number of ways. For example, all homebuyers, regardless of income, may take a mortgage interest deduction, whereas mortgage tax credits are available only to holders of MCCs.
A tax deduction or a tax-deductible expense affects a taxpayer's income tax. A tax deduction represents an expense incurred by a taxpayer. They are variable amounts that a taxpayer can subtract, or deduct, expenses from gross income when computing his/her income taxes. As a result, the tax deduction lowers the overall taxable income and thus lowers the amount of tax paid.
A tax credit is a similar concept, but is different in that it reduces the tax owed, rather than reducing taxable income. This amount of tax savings is not dependent on the rate the taxpayer pays.
An MCC provides a tax credit, based on a percentage (as determined by the Program guidelines) of the mortgage interest paid annually. The remaining mortgage interest paid annually may still be taken as a tax deduction when the taxpayer computers his or her income taxes.
The new MCC holder may receive the complete MCC tax credit saving annually at the time they file their tax return. Or they may receive the benefits monthly by adjusting their federal income tax withholding by filing a revised W-4 with their employer. By filing a revised W-4, the number of exemptions will increase, reducing the amount of taxes withheld and increasing the disposable net income.
Note: Homebuyers are encouraged to consult with a tax advisor and employer to help them with the necessary tax forms and, if they so choose, to properly adjust their tax withholding.
The GSFA MCC holder will need to Contact GSFA to request a replacement certificate. A fee may apply.
The MCC may be reissued in the event the homeowner refinances, if the Reissue MCC Application (RMCC) is submitted and approved by GSFA within one year of the refinance and if the homeowner qualifies under the program guidelines. The term on the RMCC will be for the remaining term of the original loan. In addition, an RMCC non-refundable application fee may apply. Contact Us for complete guidelines or to apply for an RMCC from GSFA.
* The GSFA MCC Program was formerly known as the CHF MCC Program.
Golden State Finance Authority (GSFA) was formerly known as California Rural Home Mortgage Finance Authority or CRHMFA Homebuyers Fund (CHF). A formal name change is pending.
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