5Volts reference putting out 12 volts with key on 18 volts with car on(overcharge)

I give up. What model year Mustang are we dealing with exactly?

What does the voltage read at the alternator main B+ terminal with the motor running?

You also need to learn about voltage drop testing and WHY a VOM isn't always the best way to test car electrical. WHY? Because the VOM has such high impedance that it won't "load" the circuit. That is why for many applications a test light is a better testing method because it "loads" the circuit thus testing the circuit's ability to carry a current.

Note, for the 1999-2004 Model year Ford uses a mix of 5 volt VREF and 12 volt reference sensors. This is a Ford (not a GM). Wiring diagrams can help you to determine which sensor is powered from which source.

Also, if you are testing the 5 volt reference for accuracy THEN you need to use the GY/RD wire as the ground reference.

Also. The IAC is powered via the 12 volt engine buss. So it would be expected to read 12 volts.

Howto perform charging system voltage drop test

The usual cause for over charging is from a voltage regulator "issue". Are you certain that the correct alternator has been used for this application? Ford does use alternators that are similar with different internal regulators. The difference can be very subtle and hard to notice from the outside.

Note, for a non PCM controlled alternator (like this model year), the high voltage isn't likely to be from an external signal to the alternator. EXCEPT for the 1996-1998 model years there is a W/BK jumper between two "S" pins of the alternator connector. Does your alternator have this external jumper?

But it would be wise to CONFIRM that all of the grounds supporting the charging system are solid and can carry a real current.

It also might be a good idea from you to remove the alternator and have it "bench" tested at your local auto parts store.

I have helped people that in the quest for a nice engine bay have powder coated the alternator. Only to find out that the powder coating affected the alternator's ground.

If this were my car I would be very concerned about the over voltage hurting the PCM.