Missouri Housing Development CommissionTax Credit Advance Program Information

By
Real Estate Agent with Amanda Realty Group (Alexander Realty)

Innovative New Program For First-Time Homebuyers

 J.L Nolan Real Estate L.L.C

MHDC is offering a  product to enable first-time homebuyers to take advantage of the $8,000 federal first-time homebuyer tax credit. This program is the first of its kind in the nation.


The federal first-time homebuyer tax credit was created by Congress this summer to encourage new homebuyers to purchase homes and thereby stimulate housing markets. However, the federal tax credit has been largely ineffective. One of the primary reasons the federal credit hasn't worked is that the homebuyer doesn't receive the money until he receives his federal income tax refund - which may be several months after the home is purchased.

 

With over 30 years experience funding mortgages for first-time homebuyers, MHDC knows that the biggest barrier faced by first-time homebuyers is acquiring money for downpayment and closing costs. As a result, MHDC created a program that allows homebuyers to receive the value of the tax credit at the time of closing.
 

 

How the Federal First-Time Homebuyer Tax Credit Works:

 

bullet First-time homebuyers receive a tax credit worth 10% of their home purchase, up to $8,000. The credit is claimed on the homebuyer's federal tax returns. The credit is refundable, which means that the homebuyer receives a refund for the amount of the credit minus any federal tax liability. Buyers must live in the house for at least three years, or they will be obligated to pay back the credit.


How the MHDC Tax Credit Advance Loan Program Works:
 

bullet MHDC makes a second mortgage to the homebuyer at the time of closing worth up to 6% of the home purchase price or a maximum of $6,750, which is used to cover downpayment and closing costs. The tax credit advance loan is paired with MHDC financing for the first mortgage in the form of a safe 30 year, fixed rate mortgage (both mortgages must be applied for through a participating lender). The homebuyer then files for the federal tax credit and uses the credit refund to pay off the MHDC tax credit advance loan. If the tax credit advance loan is paid off by the designated deadline (no later than June, 2010), the homeowner pays no interest other than a modest servicing fee. If the tax credit advance loan is not paid in full by the deadline, principal and interest payments to repay the loan over 10 years begin automatically.
 

 

Purchase Price Limits

Type of Home

Non-Target Area

Target Area*

Single family home

$258,690

$316,177

Duplexes

$291,280

$355,000

 

Posted by

Amanda Alejandro

 

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Topic:
Home Buying
Location:
Missouri
Groups:
Active Rain Newbies
Tags:
home buyer
first time buyer
tax credit

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Amanda Alejandro

President Amanda Alejandro Realty Group
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