December 19, 2019 | Bulletin #19-18
Loan Limit Increase for GSFA Down Payment
Assistance Programs
In line with the recent announcement from the Federal Housing Finance Agency (FHFA), GSFA is increasing the loan limit for the GSFA Platinum and GSFA OpenDoors Programs to $510,400, effective January 1, 2020. The updated loan limit is applicable to both conventional and government loan transactions.

The  Online Reservation System will be updated today, so that Participating Lenders may begin originating mortgages with this new loan limit. However, all loan transactions with higher loan amounts eligible under this update must have funding or settlement dates on or after January 1, 2020.

Program Term sheets have been updated and are available online.

Additional Resources:

MCC Program Updates

GSFA is pleased to announce that a new allocation is available for the GSFA Mortgage Credit Certificate (MCC) Program. An MCC allocation for $223,473,725 in First Mortgages is available from December 11, 2019 through December 31, 2021.

In addition, the GSFA MCC Program is now available in Santa Barbara County.

The Program Summary has been updated online.
What is an MCC and How Can it Benefit a Homebuyer?
The GSFA MCC program can help first-time homebuyers purchase a home. Through the use of an MCC, eligible homebuyers increase their ability to qualify for a mortgage loan and reduce their effective mortgage interest rate. The first-time homebuyer requirement is waived for qualified veterans or if the property being purchased is in a Targeted Area.

The federal income tax advantage provided by the GSFA MCC is equal to 20% of the mortgage interest paid annually on a dollar for dollar basis. This means a total of 20% of the annual mortgage interest is deducted directly from annual tax debt. The remaining 80% of the mortgage interest can still qualify to be taken as a deduction from gross income in the usual manner.

 
Additional Information and Resources:
Dollar-for-dollar Tax Credit
An MCC allows a homeowner to get back a substantial portion of the mortgage interest paid every year.

Longterm Savings
The tax credit can be taken every year the person owns and lives in the home and pays mortgage interest. In addition, if the homeowner refinances, they can apply for a reissuance of the MCC certificate (RMCC) to continue to file for the annual tax credit.

Improves Qualifying Power
An MCC can help the borrower qualify for the initial mortgage loan also, because it impacts their "available" income and other eligibility factors.

Flexible and Convenient
An MCC can be obtained with a variety of mortgage loans, including conventional, FHA, and VA loans. An MCC Lender helps the homebuyer apply for the MCC at the same time he/she applies for a mortgage loan.
MCC Promotion
The GSFA MCC Application fee will be reduced from $650 to $450 if the MCC reservation is made in conjunction with a GSFA DPA Program reservation.

In order to take advantage of this ongoing promotional offer, Lenders must provide GSFA with a copy of the DPA Funding Commitment Notice along with the GSFA MCC Closing Package in lieu of the full Application Fee.

For more information, please Contact GSFA.
© 2019 Golden State Finance Authority. All rights reserved.

Program Bulletins are intended for mortgage professionals only. This is not an offer for extension of credit nor a commitment to lend and is subject to change without notice. Complete program guidelines, loan applications, interest rates and annual percentage rates (APRs) are available through GSFA Participating Lenders.

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