ADMINISTRATOR S GUIDELINES

Transcription

1 El Paso County, Colorado Mortgage Credit Certificate (MCC) Program ADMINISTRATOR S GUIDELINES Published: April 11, 2018 Updated: 06/05/18

2 El Paso County, Colorado MCC Program Page!2 TABLE OF CONTENTS UPDATES 3 WHO TO CONTACT 4 A LENDER S STEPS TO SUCCESS - A LENDER TEAM EFFORT 5 PROGRAM PARTNERSHIPS 6 MCC COMPLIANCE REQUIREMENTS 6 FIRST-TIME HOMEBUYER 7 HOMEBUYER EDUCATION 7 INCOME LIMITS 7 PROPERTY REQUIREMENTS 8 El Paso County Targeted Census Tracts 9 QUALIFYING FOR CREDIT 9 FIRST MORTGAGE LOAN OPTIONS 9 Prohibited Loans 10 MCC Processing Timetable 10 SUMMARY OF ALLOWABLE PROGRAM FEES 12 COMPLIANCE INCOME CALCULATION OVERVIEW 14 MCC PROGRAM FORMS 18 WHO SIGNS MCC FORMS 19 OTHER DOCUMENTS REQUIRED FOR MCC COMPLIANCE FILE 19

3 El Paso County, Colorado MCC Program Page!3 UPDATES Date Page(s) Revised income limits & sales price limits Revised 2 unit property purchase price limits 8

4 El Paso County, Colorado MCC Program Page!4 WHO TO CONTACT Question General Program Compliance Questions Assistance with ehp Lender Portal Assistance with User Credentials for ehp Lender Portal Update an Underwriter Certified Loan Program Training Problems with Training System Software Training for ehp Lender Portal Program Web Page on ehp Web Site Questions regarding the shipping of closing loan files Direct Questions to: ehousingplus (ehp) ehousingplus (ehp) ehousingplus (ehp) ehousingplus (ehp) ehousingplus (ehp) ehousingplus (ehp) for questions regarding the program compliance file Contact Information Sue Denihan Patt Denihan Joe Athey Jennifer Erwin Vicki Stewart Anyone at ehp Compliance Office Click on this link Joe Athey Click on this link for the once weekly Live Webinar: Or Contact: Jennifer Erwin Vicki Stewart Click on this link Questions regarding exceptions ehousingplus (ehp) for questions regarding exceptions on the program compliance file Debbie Kerr X216

5 El Paso County, Colorado MCC Program Page!5 Exactly what does a lender have to do in addition to what is normally done? It s easy. A LENDER S STEPS TO SUCCESS - A LENDER TEAM EFFORT 1. ATTEND lender online and webinar training 2. APPLY for lender credentials to access ehousingplus web based system 3. QUALIFY the Applicant 4. QUALIFY the Property 5. REVIEW allowable products 6. HAVE Applicants sign and date the program disclosure Notice to Buyers and Recapture brochure - available on ehousingplus website El Paso page.. 7. RESERVE the MCC in the ehousingplus online Lender Portal. 8. FOLLOW the program timelines. 9. Your underwriter must COMPLETE the ehousingplus online Underwriter Certification following FINAL credit approval 10. PREPARE for closing. Review program allowable fees and charge appropriately. Print closing form from the ehousingplus website. They are the only acceptable forms. 11. ADVISE Title Company to return signed program forms to YOU, the Lender. 12. PREPARE the ehousingplus Compliance File. Print ehousing Plus Compliance File checklist to assemble. 13. EXPECT an within 48 hours of our receipt of your file indicating approval or exceptions. 14. CURE exceptions within 2 weeks of notice. Twice a month, ehousingplus mails approved MCCs to borrowers and includes the Final Recapture Notice. ehousingplus also prepares required federal reports for lenders.

6 El Paso County, Colorado MCC Program Page!6 PROGRAM PARTNERSHIPS El Paso County, Colorado offers the federally authorized Mortgage Credit Certificate (MCC) Program. Participating Lenders originate first mortgage loans to borrowers that qualify for a Mortgage Credit Certificate. Participating lenders provide the delivery network to potential MCC Applicants. ehousingplus as the Program Administrator provides the HDS web-based program loan reservation and management system, Administrator s Guides, program forms, Lender program and system training, notices and updates to Lenders, compliance support to Lenders, reviews Compliance files, monitors timelines, works with the Issuer and working group professionals on program goals. There are others who may impose some direction such as FHA, VA, Freddie Mac, you are urged to speak with your company s underwriter. MCC COMPLIANCE REQUIREMENTS El Paso County, Colorado has authorized the issuance of Mortgage Credit Certificates (MCCs), a federal income tax credit. The credit offers a dollar for dollar decrease in the amount of actual federal income taxes due (also known as tax liability). So the MCC has value only if the MCC applicant has tax liability after all other deductions and credits have been applied. THIS IS CRITICALLY IMPORTANT: IT S NOT A LENDER S JOB TO determine the amount of the credit, if any. THIS IS A JOB FOR THE APPLICANT S tax professional. Lenders should refer MCC applicants to the applicant s tax advisor, tax preparer or the IRS for assistance. In this program the federal income tax credit offered is 50% (the credit rate). The maximum MCC benefit is capped at $2,000 per year. So 50% of the mortgage interest paid each year up to $2,000 is the maximum tax credit dollar amount and the remaining mortgage interest continues to be a federal income tax deduction. If not all $2,000 can be used in any year, it can carry forward for up to three years. To claim the credit, each year the homeowner files Form 8396 with their federal income tax return. The form is available on the IRS website. The benefit of the MCC program continues for the term of the mortgage as long as the holder of the MCC continues to own and occupy the home as their principal, primary residence under the mortgage for which the MCC was issued. The only exceptions would be caused by death or divorce of the original MCC applicant(s). Assistance with compliance issues = see Who to Contact on page 4. There are a few things that can t be done. MCCs cannot be issued for the refinancing of an existing mortgage or in connection with a mortgage from a relative. MCCs cannot be used in connection with a mortgage revenue bond program loan. But the program does permit temporary, construction or bridge financing with a term of 2 years or less being refinanced into the program with the cost of the home as long as the total meets acquisition limits. The MCC is not a mortgage. It must be used with a mortgage and both the MCC and mortgage must be originated by the same lender that has partnered with the County. In this Guide, see the section entitled First Mortgage Options.

7 El Paso County, Colorado MCC Program Page!7 Important: all or a portion of the MCC related tax credit may be subject to recapture if the Residence is sold or ceases to be the Applicant s principal residence within the first full nine years of purchase. This tax credit recapture is further explained in the Notice of Potential Recapture and the About Recapture Tax handout that you attach to the MCC applicant s copy of the Notice. For those approved, a Final Recapture Notice is mailed to the MCC applicant with the MCC Certificate. For more information see IRS Form 8828 and instructions that are available on the IRS website. FIRST-TIME HOMEBUYER Any party liable on the Note that also has a present ownership interest in the residence subject to the mortgage must be a first-time homebuyer (this does not include a payor or guarantor that does not have a present ownership interest [for example, a parent that is liable on the Note but is not taking an ownership interest]). The only exceptions are for homes located in Targeted Areas or for veterans discharged other than dishonorably under the Veterans Exception feature. All applicants must qualify for credit. See Qualifying for Credit on Page 8 of this Guide. All applicants must be considered irrespective of age, race, color, religion, national origin, sex, marital status, military status or physical handicap. Not required but recommended. HOMEBUYER EDUCATION INCOME LIMITS Count current income of all persons who will live in the property who are 18 years of age or older. Unlike income that is averaged for credit underwriting, the program is concerned with actual current income. Gross monthly income is the sum of monthly gross pay; any additional income from overtime, part-time employment, bonuses, income from self-employment, dividends, interest, royalties, pensions, VA compensation and net rental income, other income (such as alimony, child support, public assistance, sick pay, social security benefits, unemployment compensation, income received from trusts, and income received from business activities or investments, continuation of which is probable based on foreseeable economic circumstances based upon the Applicant s Affidavit (to such effect), all as computed at the time of application for a Mortgage Loan, adjusted per Underwriter review and confirmed at the time of Closing. Information with respect to gross monthly income may be obtained from the applicable certificates and affidavits provided. It s important that any gross monthly income not included for credit underwriting purposes be included in determining gross monthly income for program calculation of income. So credit qualifying income can never exceed program qualifying income. Please do not reserve funds unless you are certain the transaction will make the processing timetable. Loans that do not meet the processing timetable will cancel automatically. Please note that new construction, REO s and short sales cannot be reserved earlier than 45 days before closing. The affidavit, executed by the applicants), and certified by the lender, must include the total verified annual household income. Credit qualifying income can never exceed program qualifying income.

8 El Paso County, Colorado MCC Program Page!8 Determine the household size count everyone who will live in the home.adults and children. Include non-borrower co-habitants who will reside in the property. However, do not include (1) dependents that are claimed on tax returns but who will not permanently reside in the home the majority of the time and (2) co-signers. Maximum Household Income Limits Loan reservations 05/23/18 and after. Persons in the household Non-Target Area Targeted Areas 1-2 person Household $82,600 $99,120 3 or more person household $94,990 $115,640 Maximum Household Income Limits Loan reservations PRIOR to 05/23/18. Persons in the household Non-Target Area Targeted Areas 1-2 person Household $77,800 $93,360 3 or more person household $89,470 $108,920 ACQUISITION LIMITS (SALES PRICE) The sales price must include everything paid by the buyer or on the buyer s behalf. Maximum Sales Price Limits Loan reservations 05/23/18 and after. 2 unit property rev 06/05/18. Non-Target Area Targeted Areas 1 Unit Property $280,588 $342,941 2 Unit Property $359,738 $439,679 Maximum Sales Price Limits Loan reservations PRIOR to 05/23/18. Persons in the household Non-Target Area Targeted Areas 1 Unit Property $262,588 $320,941 2 Unit Property $336,153 $410,854 PROPERTY REQUIREMENTS Properties must be located in El Paso County, Colorado. They may be a completed newly constructed home (not previously occupied) or an existing home. They may be attached or detached. Both new and existing may be a condo or townhome. Mobile, recreational or vacation homes are not eligible under the program. They may be single family homes of 1-2 UNITS. Freddie limits to 1 unit. 3-4 unit properties are not permitted.

9 El Paso County, Colorado MCC Program Page!9 For 2 unit properties, MCC applicant must live in one unit as their principal, primary residence. Also two unit dwellings must have been first-occupied at least 5 years prior to the MCC transaction closing. Follow Agency (FHA, VA, etc) Guidelines for Maximum Mortgage Amounts. El Paso County Targeted Census Tracts Targeted Areas allow non-first-time homebuyers and higher income and sales price limits. Colorado, El Paso County, Census Tracts DAY REQUIREMENT - Within 60 days of closing, the homebuyer must move into the home purchased as their principal/primary residence. QUALIFYING FOR CREDIT Lenders follow FHA, VA, RD and Freddie guidelines. This is a relationship outside the program. Lenders are responsible for credit qualifying decisions. Applicants must be able to qualify for credit. FIRST MORTGAGE LOAN OPTIONS Both the MCC and mortgage must be originated by the same Lender that has partnered with the County. Applicants have varying needs. Some want and need the lowest mortgage rate possible with the lowest costs. The Lender may offer a loan product of their own along with a MCC. Such loans must have a fixed rate and be insured or guaranteed by FHA, VA, USDA or be a CONVENTIONAL loan sold to Freddie or Fannie. The term of the mortgage loan to which the MCC is attached may be up to and including 40 years AS ALLOWABLE BY AGENCY (FHA, VA, etc). Also permitted is a Turnkey first mortgage offered by the County because it is not funded with tax exempt mortgage revenue bonds. Program First Mortgage Down Pay /Closing Cost Assistance Costs Lender Market Rate None Whatever is paid by Lenders other buyers without MCCs Compliance Admin Fee is $750 El Paso County Housing Authority Turnkey Mortgage Origination Program Slightly Above Market A percentage of Note Amount as the El Paso County Turnkey Mortgage Grant Program. When first mortgage is paid off, there is nothing due on the Grant. Determined by Program Features a Combo Compliance/Admin Fee of $875 for the Turnkey First, Assistance Grant and MCC.

10 El Paso County, Colorado MCC Program Page!10 Prohibited Loans MCCs may not be issued for loans funded from a mortgage revenue bond program or for loans made by persons related to the buyer. No interest may be paid to a person related to an applicant. MCC s may be used in conjunction with the El Paso County Turnkey Program as it is not a tax exempt mortgage revenue bond program. MCC Processing Timetable From To # Days MCC Program Reservation AND First Mortgage Reservation\ Underwriter Certification 15 MCC Program Reservation AND First Mortgage Reservation MCC Program Reservation AND First Mortgage Reservation Loan closed, delivered to US Bank and compliance file delivered to ehousingplus Compliance file approved, Exceptions cleared and first mortgage loan purchased Once notified of Exceptions, lenders must CURE exceptions within 2 weeks (10 business days) of notice. Loans not meeting the deadlines, will cancel automatically without further notice. Lenders should review their pipeline reports on a continuous basis in accordance with the provisions of the Participation Agreement. Please do not reserve funds unless you are certain the transaction will meet the processing timetable. Loans that do not meet the processing timetable will cancel automatically. Please note that new construction, REO s and short sales should be reserved at an appropriate time to assure the loans meet the Processing Timetable. Reasonable expectations for new construction, short sales and REO s, these products should not be reserved until 45 days before closing.

11 El Paso County, Colorado MCC Program Page!11 Term of Program: MCCs may not be made for loans closing after December 31, 2019 Make certain that loans meet all deadlines that may be imposed on the program. Check with the program administrator for further information. FEDERAL REPORTING REQUIREMENTS In January, following a year when the Lender has originated a loan with a MCC, ehousingplus will provide the Lender IRS Form 8329 the Lender s Annual Report. The Lender reviews, adds information as needed, signs, dates and sends to the IRS.

12 El Paso County, Colorado MCC Program Page!12 SUMMARY OF ALLOWABLE PROGRAM FEES First Mortgage - Lenders are permitted to charge their usual, customary and reasonable fees charged to other buyers of similar, fixed-rate products without MCC s. Additional Lender Compensation for the MCC The lender receives a $75 MCC Application fee charged at loan application and retained by the Lender. At closing, the program administrator s fees apply. In order to receive Compliance Approval all program requirements must be satisfied including the payment of fees to the program administrator. Using both the El Paso County Turnkey first mortgage program loan with automatic assistance grant and the El Paso County, Colorado MCC program: Combo Fee in total is $875 OR Using only the El Paso County MCC program: $750 The interest rate on the mortgage loan shall be comparable to the rate on similar loans not receiving an MCC. Lenders fees on the first mortgage can be no more than those charged on loans without MCCs. Chronically Deficient Files Penalty fee of $100 for files that are chronically deficient. OTHER FEES MCC ReIssuance Fee In the event of a refinance, the MCC may be reissued in the first two years of a program. for re-issuance is $300. Fee

13 El Paso County, Colorado MCC Program Page!13 ehousingplus (ehp) is the program administrator. In that role, ehp provides lenders tools and information to assure compliance with MCC program requirements. The HDS web based system used by ehp allows lenders to reserve, track, and manage the MCC process. Technology is used to train lenders and to provide credentials for system access. The steps to originate loans with MCC s involve Qualifying the applicant(s) and spouses as first-time buyers Reviewing income of MCC applicant(s) and spouses and all other household residents 18 yrs or older with income. Reviewing property type, age, number of units, cost and location Assuring allowable loan products are being utilized Having applicant(s) sign upfront MCC forms Reserving the MCC online in the program administrator s system at the appropriate time to assure program processing and delivery calendar is met Lender s Underwriter plays key role in reviewing all information for final credit approval and completing an online certification that prevents any further changes MCC closing forms are accessed in program administrator s system that prints applicant specific MCC forms Program fees reviewed and applied as directed Loan to which MCC is attached is closed and MCC closing forms are executed Program administrator s Compliance File Checklist used to prepare folder that is sent to ehp for review Checking program administrator s online system for review status. Clearing exceptions in 10 business days When a transaction meets all qualifying criteria including payment of fees, program administrator grants compliance approval. Then the MCC Certificate and Final Recapture Notice are mailed to the applicant(s) by ehousingplus. In January of each year following a year in which the Lender originated loans with MCC s, the program administrator provides Lender reporting form for review, execution and submission to the IRS.

14 El Paso County, Colorado MCC Program Page!14 COMPLIANCE INCOME CALCULATION OVERVIEW Use the information below as a general guide. Because each case is different, please contact program administrator s compliance staff if you have questions. Unlike income that is averaged for credit underwriting, the program is concerned with actual current income. You should be reviewing the YTD income, the income of the last 4 months and the income shown on previous tax returns for consistency. You should not be averaging income. If there are not inconsistencies in earnings, use the guidelines for each loan type to determine current gross monthly income. Current gross monthly income is multiplied by remaining months in the year to determine "total current annualized income. For the tax year in which the closing occurs, consider YTD income. Then establish current base income for the balance of the year using the guidelines for each type of income. Then consider any additional income. For assistance, contact the Compliance Office. Gross monthly income is the sum of monthly gross pay; any additional income from overtime, parttime employment, bonuses, income from self-employment, dividends, interest, royalties, pensions, VA compensation and net rental income, other income (such as alimony, child support, public assistance, sick pay, social security benefits, unemployment compensation, income received from trusts, and income received from business activities or investments, continuation of which is probable based on foreseeable economic circumstances based upon the applicant(s) affidavit (to such effect), all as computed at the time of application for a mortgage loan and confirmed at the time of closing. We will check information with respect to gross monthly income obtained from the reservation form, underwriter s certification and applicable certificates and affidavits executed the date of the closing of the mortgage loan, provided that any gross monthly income not included for credit underwriting purposes must be included in determining gross monthly income. The limit is the limit and any amount over the limit is not acceptable. In determining household size, do not include (1) dependents that are claimed on tax returns but who will not permanently reside in the home the majority of the time and (2) co-signers. The affidavit, executed by the applicant(s), and certified by the lender, must include the total verified annual household income. The program requires that underwriters consider the income of: (1) the MCC applicant(s), (2) any person expected to both live in the residence and sign the note, and (3) any person who is both the legal spouse of the applicant. Questions regarding the calculation of income for program purposes should be directed in writing to the program administrator s compliance office services@ehousingplus.com. Doing assures you have a written response. There are many variables and the Compliance office will be pleased to assist. Because a program qualifier is income, even if not required for credit purposes (i.e. automated underwriting), you should be seeking the two most current paystubs with YTD. Do not include in the compliance file, keep copies for your records. The Servicer requires the complete closing and credit documentation as identified on their specific loan delivery checklists. Lenders may rely on the same documentation for program compliance purposes. Documents should be consistent.

15 El Paso County, Colorado MCC Program Page!15 Although reference is made to the last 4 to 6 weeks income, Underwriters should be reviewing the income tax returns submitted to verify that there are no unexplained and/or unacceptable differences current income to past income. Examples below not intended to serve as exclusive methodology. Please contact the program administrator s Compliance office with questions regarding individual cases. Please note that the income reported for income calculation CAN NEVER BE LOWER THAN THE INCOME USED TO QUALIFY FOR CREDIT PURPOSES. Hourly Employees For the tax year in which the loan is closing, use the Year to Date base income. If consistent, utilize the base to determine the balance of the year by 1. Using last 4 to 6 weeks' pay stubs, identify hourly rate of pay and average number of regular hours worked per week. Multiply hourly rate times regular weekly hours. Multiply result times number of weeks for balance of year and add to YTD for an annualized base salary. 2. If the person has no other sources of income (for example: overtime, bonus, commissions, second jobs, interest, dividends, child support, alimony, public assistance), this will be the Current Total Annual Income. 3. Compare the total annual income in #2 above to Paystubs, VOE s, previous year s income per W2 s and tax returns. You should not find significant differences. In some cases, the Current Total Annual Income will be higher than the previous year's income. Variances should be attributable to increases/ decreases in pay or number of hours worked. Salaried Employees 1. Using last 4 to 6 weeks' pay stubs, identify weekly (or other frequency) rate of pay. times 2. The number of regular pay periods in the year (52 weeks, 12 months, 24 semi- months) Multiply rate 3. If the person has no other sources of income (for example: overtime, bonus, commissions, second jobs, interest, dividends, child support, alimony, public assistance), this will be the Current Total Annual Income. 4. Compare the total annual income in #2 above to Pay stubs, VOE s, previous year s income per W2's and tax returns. You should not find significant differences. In some cases, the Current Total Annual Income will be higher than the previous year's income. Variances should be attributable to increases/ decreases in pay or number of hours worked

16 El Paso County, Colorado MCC Program Page!16 Business, Self Employment 1. Use the quarterly tax returns and financial statements to identify the current NET year to date income. 2. Divide the year to date income by the number of months during which it was earned and 3. Multiply times remaining number of months in year. Add to actual YTD. ADD DEPRECIATION. 4. If the person has no other sources of income (for example: overtime, bonus, commissions, second 5. Jobs, interest, dividends, child support, alimony, public assistance), this will be the Current Total Annual Income. 6. Compare the total annual income in #2 above to the previous year's income per W2's and tax returns. You should not find significant differences. Verified Termination of Overtime, Commission, Bonus, Seasonal, Periodic, One Time Overtime, Bonus, Commissions Using last 4 to 6 weeks' pay stubs, identify the year to date total earnings of the borrower. Subtract the Current Total Base Income (see above) to arrive at the total year to date extraordinary income. If verification of termination of overtime, commission or bonus is provided in writing (i.e. a letter from an employer) or such termination is due to a change of employment, use the current YTD overtime, commission or bonus, do not annualize and add as a lump sum to the Current Total Annual Income. Regular Overtime, Bonus, Commissions 1. Using last 4 to 6 weeks' pay stubs, identify the year to date total earnings of the borrower. Subtract the Current Total Base Income (see above) to arrive at the total year to date extraordinary income. 2. Divide the year to date extraordinary income by the number of pay periods during which it was earned (to obtain an average). Multiply times the appropriate factor (Balance of year weeks, months, semi- months, etc.) for balance of year figure and add to actual YTD extraordinary income for annual income. 3. If the person has no other sources of income (for example: second jobs, interest, dividends, child support, alimony, public assistance), this will be the Current Total Annual Income. 4. Compare the total annual income in #2 above to Pay stubs, VOE s, previous year s income per W2's and tax returns. You should not find significant differences. In most cases, the Current Total Annual Income will be higher than the previous year's income. It will also generally be higher than the annualized year to date income. The variances should be attributable to increases/decreases in pay.

17 El Paso County, Colorado MCC Program Page!17 Interest, Dividends 1. Use current earnings statements issued by the bank, investment broker or agent. Identify the year to date interest or dividend earnings. Divide by the investment term year to date (for an average) and multiply times appropriate factor to annualize the earnings. 2. If statements are not available, and the terms of the investment agreement are available, multiply the 3. Principal amount of the asset times the annual interest yield factor for a projected interest earnings amount. 4. If neither are available, use the previous year's earnings statements or tax returns to identify total annual interest and dividend income. If the assets are still invested in the same instruments, use the previous year's figure. 5. Add the result of the computation in either #1, #2 or #3 above to the Current Total Annual Income. Alimony, Child Support 1. Use the monthly amount appearing in the divorce decree, separation agreement or other support document. 2. If the borrower receives more than the amount stipulated in the agreements, use the monthly figure that the borrower declares and can be verified. 3. If the borrower receives less than the amount stipulated in the agreements and there is a verifiable history of the underpayments for at least 2 years (as evidenced by Court records), then use the past 2 years' historical monthly earnings. If there is no such history that can be verified, use the amount stipulated in #1 above. 4. Multiply the monthly amount of alimony or child support times 12. Add to the Current Total Annual Income (plus any other income sources). Pensions, Temporary Payments 1. Use the benefits statement issued by the benefits provider (pensions, workers compensation, disability compensation, social security, AFDC, etc.) to identify the amount of the benefit, payment frequency and expected term of the benefit. 2. Multiply the amount of the benefit times the payment frequency for the balance of year and add to actual YTD for an annualized amount. Add to the Current Total Annual Income (plus any other income sources). 3. If the benefit is absolutely not payable to the recipient beyond a given date (that means a complete and permanent stop of benefits without extensions, exceptions, waivers or other conditions) and such date is within 12 calendar months of the anticipated closing date, then calculate the benefits expected through the end of the benefits term. That will be the total annual income amount from the specific benefits source. Add to the Current Total Annual Income (plus any other income sources).

18 El Paso County, Colorado MCC Program Page!18 MCC PROGRAM FORMS The program forms are generated directly from the ehousingplus Lender Portal at the loan level. The program forms MUST be printed from the Lender Portal. It is not acceptable to re-type program forms, give program forms to a third party or upload program forms to a lender s system. The MCC forms: MCC Compliance Checklist - This is the cover sheet for your compliance file. Use it as a guide in preparing the compliance file folder; the complete folder is to be sent to ehousingplus within 10 days of closing. MCC Notice of Potential Recapture - This form is the program disclosure and must be signed upfront. Notice must be provided to borrowers prior to MCC reservation and signed by all MCC applicants. Attach About Recapture Tax information sheet to applicant s copy. Lender s underwriter verifies that Notice of Potential Recapture has been signed. Send signed original in compliance file. MCC About Recapture Tax - This form is not signed. A copy of it should be attached to the MCC Applicant s copy of the Notice of Potential Recapture. MCC Affidavit/Certification - This form must be signed at closing not before or after. This document has three sections - Applicant Affidavit section for those in title whether or not an applicant to be signed at CLOSING and notarized (Pagers 1-3); Seller/Builder affidavit section to be signed at CLOSING by all seller s named on real estate purchase contract and notarized (Page 4); Lender certification section to be signed by authorized officer of lender. Send signed original in compliance file. (Page 5) Forms that are in the secure Lender Portal auto-fill using a specific MCC applicants information. There are only a few blanks that are not completed. The forms cannot be accessed until the lender s underwriter completes and submits an online underwriter certification following the lender s final credit approval. All four forms are accessible in the Forms section of the Lender Portal. The Notice of Potential Recapture is signed upfront as the only MCC program disclosure. So it is also available on the ehousingplus El Paso County, Colorado MCC program page as it must be signed before MCC reservation. Go to ehousingplus.com Then click on Programs. Choose COLORADO and then El Paso MCC. The Administrator Guidelines and Pre-Closing Notice of Potential Recapture form are located on this webpage as well. This is done to facilitate use of the forms upfront. Following Compliance Approval, FINAL RECAPTURE FORM (aka MCC Final Recapture Notice) required by law is mailed to the applicant WITH THE MCC. Approved MCCs are mailed twice a month to compliance approved applicants at the property address.

19 El Paso County, Colorado MCC Program Page!19 WHO SIGNS MCC FORMS The simple rule of who signs program forms if the person is named on the Warranty Deed, they sign the program forms. If they are not named, they do not sign the program forms. Also, remember cosigners cannot live in property, do not sign MCC documents and under no circumstances have an ownership interest in the property. Having people sign documents who should not sign is as incorrect as not having all sign who should. OTHER DOCUMENTS REQUIRED FOR MCC COMPLIANCE FILE Tax Returns/Tax Transcripts From April 15 the past three years tax transcripts or copy of filed returns or a combination of either are required for all applicants and spouses. Tax transcripts do not need a signature. Not required for those buying in Targeted Areas or those purchasing under the Veteran s Exception. IRS requests for Extensions are not acceptable in lieu of tax transcripts or returns. Real Estate Purchase Contract The full address of the property, full names of all sellers and buyers, total purchase price of the property must be included. If there is not an address for new construction, a lot number and subdivision name are required. All named persons must sign. Include the name and title whenever a representative is signing for a corporation. Final Typed Loan Application (1003) The typed application signed and dated by all parties is required. Loan interviewer must complete and sign page 3 of 4 of the If this is not possible, then an officer must sign in place of the interviewer. All persons taking title to the property must execute all MCC documents. The income disclosed on the Affidavit must be the same or more than that shown on the The purchase price, loan amount, and other financial details must be the same as shown on all other documents. Closing Disclosure (TRID) Applicant must fully execute the Closing Disclosure. MCC Applicants on the Closing Disclosure must be all persons taking title to the property and match the Affidavit and application. Persons not taking title to the property may not appear or sign the Closing Disclosure. Proceeds of this loan may not be used to purchase personal property or satisfy other debts. Warranty Deed A copy of the Warranty Deed is required. Discharge Papers Veterans obtaining a Qualified Veteran s Loan must provide a copy of their discharge papers.