Due to increased production in our issuance of Mortgage Credit Certificates (MCCs) and to ensure longevity of the MCC program for current and future first-time homebuyers in Virginia, VHDA is changing the credit to 10% effective with MCC Commitments on or after April 15th, 2020.
Lenders will need to be mindful of closing dates as the MCC Commitment is processed when the loan is ready to close.
Reminder: The MCC box must be checked in Mortgage Cadence before the loan is cleared to close to receive an MCC Commitment.
Is an MCC that is already issued subject to the 10% credit change?
For MCCs already issued and MCC Commitments issued before April 15th, 2020, the MCC credit will remain at 20% for the life of the mortgage as long as the homebuyer lives in the home.
What forms will reflect the credit rate change?
The tax credit rate will be listed on the MCC Commitment and the Mortgage Credit Certificate itself. The MCC Application and Fact Sheet will also mention the timeline for the old and new tax credit rates.
What is an appropriate timeline for an Originating Lender to ensure a loan is cleared to close in time to receive a credit of 20%?
Delegated lenders must have all documentation in their package so the lending underwriter can appropriately clear the loan to close within Mortgage Cadence no later than close of business April 14, 2020. Any loans that are cleared to close after business hours April 15, 2020 are subject to the 10% credit. It is recommended that Non-Delegated lending underwriters submit their loan to VHDA no later than April 8, 2020 to consider additional time needed to clear conditions if the loan is suspended. Any conditions needed to clear a loan to close must be submitted immediately to obtain a 20% credit and clear the loan to close by April 14, 2020.