# MCC Example by zcc46658

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```									               MCC Example
Here is how the Darrell Smurd family can benefit from
purchasing a home under the Mortgage Credit Certificate
Program. (Note: Figures here are rounded for simplification of Example)

Family Income:       \$6,250 per month
Loan Amount:         \$350,000
Interest Rate:       6.50%

(1)   Determine the First Year Interest Payment
\$350,000 x .065 = \$22,750
(Loan Amount x Interest Rate)

(2)   Determine the Annual Mortgage Credit
\$22,750 x .20 = \$4,550
(First Year Interest Payment x 20% MCC Credit rate)

(3)   Determine Monthly Mortgage Credit
\$4,550 ÷ 12 = \$380
(Annual Mortgage Credit ÷ 12 months)

Affordable Housing Applications, Inc.
Ahahousing.com
FOUR STEPS TO TAX SAVINGS
The Smurd family income is \$6,250 per month, earned                                                                    4)     With MCC:
through Darrell’s employment. This illustration
shows how Darrell’s take-home pay will be                                                                                     \$6,250 mo. earnings
increased with the help of a mortgage credit equal                                                                             - 620 withheld for taxes
to about \$380 per month.                                                                                                      \$5,630 take home pay

Annual Tax Debt                Withheld
\$7,450                        \$7,450

3)     New Estimate Annual Taxes                  4. With MCC, Darrell earns \$6,250/mo
and nets \$5,630/mo
\$12,000 Annual Tax Debt                      because:
-4,550 MCC Annual Credit
\$7,450 New Annual Tax Debt                   Now only \$7,450/yr or \$620/mo. is
withheld and owed in taxes.

(\$7,450 ÷ 12 = \$620/mo.)

MCC giving him a tax credit of:
Under MCC Program:                    \$4,500/yr or \$ 380/mo.

Darrell’s tax debt is reduced to:
\$4,550 per year                    \$7,450 /yr or \$620/mo.
Darrell instructs employer to
Or \$380 per month                   withhold only \$620/mo. In federal
taxes from his pay.

1)    Without   MCC
\$6,250    mo. earnings               1. Without MCC:
Darrell earns \$6,250/mo.
-1,000    withheld for taxes
and nets \$5,250/mo
\$5,250    take home pay
because :
Annual Tax Debt        Withheld
\$12,000/yr or \$1000/mo is                                                            Affordable Housing Applications, Inc.
8130 La Mesa Blvd #806
withheld and owed in taxes
\$12,000          \$12,000                                                                                                     La Mesa, California 91941
Phone (619) 469-0270
(\$1,000 x 12)                                                                                                On the web: www.ahahousing.com

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