In Massachusetts, the incentive for first-time homebuyers just got better. How's that you ask?
In a recent press release, Governor Deval Patrick today announced a First-Time Homebuyer Tax Credit Loan Program through MassHousing that will allow first-time homebuyers to borrow up to $8,000 in advance of their federal tax credit for homes purchased with a MassHousing loan before December 1, 2009.
Homebuyers who take advantage of the program will have the principal and interest payments on the tax credit loan deferred from the time of closing until the loan due date of June 1, 2010. It is important that you file for the credit when you file your taxes in 2010, otherwise you will be responsible for repayment of this loan. When the time comes, you can file using the IRS Form 5405. If you buy a house with me using this program, I will make sure to remind you about the form at the first of the year.
Who Qualifies for the Massachusetts Recovery Plan First Time Homebuyer Tax Credit?
- Applicants must be first time homebuyers using a Mass Housing mortgage through Mass Housing approved lender.
- It must be for your primary residence for a minimum of 3 years.
- You must purchase a one, two, three or four-family home from a seller that is NOT a relative by Nov 30, 2009.
Additional First Time Homebuyer Tax Credit Guidelines:
- Available to first time homebuyers only. If you have not owned a primary residence during the last three years prior to your purchase, you may qualify.
- The credit is 10% of the purchase price, up to a maximum of $8,000.
- You must purchase from January 1, 2009 and close before December 1, 2009.
- Income limit for single taxpayer is up to $75,000, and up to $150,000 for married couples.
- If you are building a new home, you will qualify providing the date of first occupancy is on or after January 1, 2009 and before December 1, 2009.
Many of you have heard for several months about the $8,000.00 tax credit that is available to first-time homebuyers. If you qualify, and you are ready to buy your first home, you do not want to miss out on this opportunity. The clock is ticking, on this offer! The December 1, 2009 deadline for this program is rapidly approaching. You must purchase and close (pass title) before December 1st. I have said this before, but let me explain what a time line for the homebuying process might look like.
- Finding the right property = 30 to 60 days (for some less, for others more) = 45 days avg
- Offer to Closing = 30 to 60 days = 45 days avg (add 90 to 180 for short sales)
- Average Days to Purchase and close on a home = 90 days, or 3 months.
For those of you with school age children, you should be in my car now looking at potential homes. The wheels on the bus will be going round and round before you know it!
Note: if you are considering purchasing a short sale property or bank owned home there is great risk of not meeting the deadline. The short sale process is still extremely slow and many bank owned properties are having title issues. You need to be aware of the risk of purchasing these types of homes.
Visit my other post MassHousing Loan Programs - Buyers Explore Your Options for information pertaining to loans that are available for this advanced tax credit benefit.
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