In this case the homebuyer will refile a W-4 form with his or her employer reflecting the MCC credit. By taking this action, the number of exemptions will increase, reducing the amount of taxes withheld, thereby increasing the borrower's disposable income. The borrower also has the option of waiting until the end of the year to realize the tax credit saving in one lump sum when filing the federal income tax returns. Regardless of whether the homebuyer adjusts the W-4 form or not, the tax credit will have to be listed when filing the federal income tax returns. Potential applicants must be referred by a participating city.
Lenders vary in their requirements.
There is no allocation of MCC's by the lender. This fee will reserve the MCC while the mortgage loan application is being processed by the lender and the administrator. An MCC can be used for single family homes, including single family detached homes condominiums or townhouses in Yorba Linda. The residence must become the principal residence of the applicant within 60 days after the MCC has been issued. MCC's can be used with conventional, fixed-rate loans, FHA and VA loans and privately insured loans.