Massachusetts has just joined a small but growing number of states which have developed a way for buyers to access the $8,000 Federal homebuyer tax credit at a time when it is the most useful in the home buying process.
First-time homebuyers with loans from the state's affordable housing bank, MassHousing, are now eligible to receive an $8,000 state loan if they buy before December 1, 2009. The loan is interest-free as long as it is repaid by June 1, 2010. By that time, buyers will have been able to claim $8,000 federal tax credit provided for in the federal Housing and Economic Recovery Act of 2008.
At a time when 82% of would-be home buyers believe that saving enough for a down payment is still their biggest obstacle to home ownership, these loans will enable more buyers to purchase their first home.
In an announcement of the new program, Governor Deval Patrick stated, "These loans will both help prospective homebuyers achieve the comfort and stability of home ownership for their families and also stimulate the Commonwealth's economy through increased home sales."
Details of the loan program:
- Homebuyers who are using a MassHousing loan to purchase their first home apply for the loan program through their lender.
- The loan is used to cover closing costs or as part of the down payment.
- In 2010, the home buyer claims the $8,000 tax credit on their 2009 federal tax return.
- The home buyer then repays the MassHousing tax credit loan.
There are no monthly payments required but the loan must be paid in full before June 1, 2010. If it is not paid in full at that time, it will be amortized for 10 year at the same rate as their first mortgage.
Copyright 2009 - Claudette Millette, President,TheBuyersCounsel - 800-392-1446, E-mail
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