It's official! Today, Pennsylvania Housing Finance Agency (PHFA) announced that it has allocated funding in the amount of $5,000,000 for the continuation of their Tax Credit Advance (TCA) program! This is a limited time offer, so take note, once they run out of money it will be too late, so you need to move now if you want to take advantage of it! 
According to Kate Newton, the Director of Homeownerships Programs for PHFA, the original program began offering the advance loans in June and by September they gave out $5,750,000 in loans and were out of money. The new funding breathes life back into this popular program and will help hundreds of Pennsylvania Home Buyers who may not otherwise be able to purchase, but don't count on any more funding coming in the future. According to an article on PAR Just Listed:
"First-time buyers will be able to receive up to $6,000 for new construction and $5,000 for existing homes, just like the PHFA program earlier this year, Newton said. PHFA will earmark $3.5 million of the total funds for first-time buyers. This time, PHFA will allocate $1.5 million of the funds for non first-time homebuyers, who must also fit the Internal Revenue Service (IRS) guidelines for the tax credit program. Non first-time buyers will be able to qualify for up to $4,000 for new homes and $3,000 for existing homes," she added.
Just like the recent Extension and Expansion of the current Tax Credit, no one expects this program to be repeated. 
If you qualify, you can take advantage of it, but my advice is to hurry up and do it now! Here are the program specifics directly from PHFA:
- TCA is available to eligible buyers getting a PHFA first mortgage and who close on their loans by June 30, 2010 (and entered into a sales contract by April 30, 2010).
- First-time homebuyers are eligible for the lesser of 10% of the purchase price OR $6,000 for newly constructed homes, $5,000 for existing homes
- Non first-time homebuyers are eligible for the lesser of 10% of the purchase price OR $4,000 for newly constructed homes, $3,000 for existing homes
- For first time homebuyers, all occupants may not have had an ownership interest in their primary residence in the last three years, nor may they have a present interest in any other real estate, except for a business property if the business is that person's primary source of income.
- TCA's minimum loan amount is $500.
- Through TCA, PHFA will make a zero percent (interest free) loan to the homebuyer at the time of closing.
- These funds must be used towards the minimum down payment requirement and/or closing costs. Under conventional guidelines, all TCA borrowers must invest a minimum of $1,000 of their own funds towards the purchase of their first home; this does not apply to FHA, VA or RD loans.
- Homebuyers must fall within the lesser of the Federal First Time Home Buyer Tax Credit income guidelines or PHFA's income and purchase price limits per county.
- TCA borrowers must require maximum financing (a maximum of five percent down) under conventional guidelines. In other words, the TCA cannot be used to fund a down payment of over five percent.
- All PHFA-eligible homes that will be used as a principal residence will qualify for the credit. This includes single-family detached homes, attached homes like townhouses and condominiums, manufactured homes, and two-unit properties (duplexes).
- TCA can be combined with PHFA's Access Modification and Purchase Improvement Programs.
- TCA cannot be combined with PHFA closing cost and down payment assistance programs (Keystone Assistance Loan, HOMEstead, or Access Downpayment and Closing Cost Assistance Programs).
- The homebuyer is responsible for claiming the Federal Tax Credit when filing federal income taxes for 2009 or 2010 and for using their refund to repay the advance to PHFA.
- TCA is a soft second loan with no interest if it is repaid in full by the following deadlines (regardless of the borrower's tax liability, when the borrower's taxes are filed, or whether the borrower seeks an extension for filing).
- Loans closed in 2009 are due to be paid back to PHFA by June 30, 2010, If the advance is not repaid by June 30, 2010, the loan will immediately begin to amortize over a 10 year period at the same interest rate as the first mortgage. This pertains to both first-time and non first-time homebuyers.
- Loans closed in 2010 are due to be paid back to PHFA by June 30, 2011, If the advance is not repaid by June 30, 2011, the loan will immediately begin to amortize over a 10 year period at the same interest rate as the first mortgage. This pertains to both first time and non first-time homebuyers.
- TCA is funded by a paper check at closing, much like the Homestead program.
- The TCA loan is only applicable on arms-length transactions (where the homebuyer is not receiving favorable treatment because of his/her relationship to the seller).
This is a Pennsylvania specific program so if you think you qualify and would like to move on this opportunity, call me, I'll be happy to help!
I'd like you to be part of the conversation, so if you like what you read here please comment, forward The Lancaster Connection.com to your friends, subscribe and as always, if you have questions, need real estate advice or want to buy or sell a home, you can call or text me at 717-371-0557, email me at Jason@JasonsHomes.com or contact me at the office at 717-490-8999!
Your Friend in Real Estate,
Jason Burkholder
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