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Information for Single-Family
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Real Estate Professionals
Program Announcement
December 24, 2015
Advanced Notice of Limited MCC Availability and Change in MCC Fee
Structure for 2016
Dear Lenders,
Thank you for your participation in the Commission’s Mortgage Credit Certificate Program. Since 2008, the Commission has administered the MCC program which has grown exponentially since inception. For 2015 thus far, the Commission has issued 2,100 MCCs. The program’s success has been largely dependent on the availability of extra bond cap to operate the program. Throughout the recession, many issuers were unable to use their bond cap authority, and this unused bond cap was assigned to the Commission for use in the MCC program. Now that the economy is bouncing back, the Commission does not expect to receive any excess bond cap and consequently does not expect to be able to issue MCCS in 2016 at the current pace.
For 2016, the Commission will have the ability to issue approximately 1,500 MCCs in connection with mortgage loans aggregating $150 million. We expect such MCCs to be fully reserved by the end of March, 2016. We will take a “Wait List” once the current allocation is fully reserved. The Commission’s Target area set asides for prior MCC programs should provide MCCs relating to an additional $90 million in mortgage loans in June, 2016 and an additional $60 million in mortgage in December, 2016 for use in the MCC program.
Please plan accordingly for these funding disruptions.
The Commission will continue to strictly enforce the reservation policies from its manual. No reservation can be made until the borrower completes a Commission-sponsored homebuyer education seminar and has a fully executed purchase and sale agreement. If a loan is reserved and found in violation of Commission policy, staff will automatically cancel the reservation regardless of circumstances. If the Commission still has MCC credit, the lender can make a new reservation. Unfortunately, if the Commission is out of MCC authority, the borrower will go to the end of the “Wait List” and may not receive an MCC. The Commission has added this language to MCC Form 13.3 for both the borrower and lender to acknowledge.
For reservations made on or after January 5th, the fee for a stand-alone MCC has increased from $650 to $1,000. For MCC reservations that also utilize the Commission’s Home Advantage first mortgage, the fee has decreased from $650 to $500. MCC Form 13.3 has also been updated to reflect this change along with the MCC program manual.
Please note the Commission continues to operate its Home Advantage program which does not rely on bond cap. The Commission has purchased over 4,000 loans from participating lenders for 2015 and looks forward to continued success in 2016. The Commission also continues to run its House Key Opportunity program and will continue to operate this program as funds are available in 2016.
The Commission thanks you for your support and looks forward to continuing its partnership in 2016. It is such partnership that makes affordable housing a reality for thousands of households in Washington State each year.
Please let me know if you have additional questions.
Lisa DeBrock
Homeownership Director