Four More States Announce Programs to Monetize Tax Credit
Four more states — Delaware, New Mexico, Pennsylvania and Tennessee — have recently taken steps to monetize the $8,000 tax credit for first-time home buyers so that it can be used to pay downpayments and closing costs.
The new programs are similar to those initiated previously in Colorado, Idaho, Missouri, New Jersey and Ohio.
Among the provisions of the latest state initiatives:
- The Delaware State Housing Agency (DSHA) provides up to $10,000 in downpayment and closing cost assistance to those who qualify for the first-time home buyer tax credit through its Second Mortgage Assistance Loan (SMAL) program. In conjunction with the program, the agency has lowered its 30-year fixed-rate mortgage interest rate to 5.5%, with zero origination points.
- The Tax Credit Loan Program from the New Mexico Mortgage Finance Agency provides a first-time home buyer with a loan of 8% of the sales price or $6,500 — whichever is less — to cover downpayment and closing costs. The home buyer uses the $8,000 tax refund to pay off the loan, which is interest-free as long as it is paid back by June 30, 2010.
- First-timers using the Pennsylvania Housing Finance Agency’s home buyer program can receive a loan to pay downpayment and closing costs with a second mortgage for the lesser of 10% of the purchase price or $6,000 for newly constructed homes or $5,000 for existing homes. The agency’s Tax Credit Advance Loan Program, however, requires borrowers to invest at least $1,000 of their own funds towards the purchase of their first home. Funding is limited, and the program is being provided on a first-come, first-served basis. Payback provisions are the same as those in New Mexico.
- In Tennessee, home buyers can receive 3.5% of the purchase price of the house through a second mortgage loan provided by the state housing development agency. The First-Time Homebuyer Credit Down Payment/Closing Cost Loan Assistance Program is interest-free until June 1, 2010. Buyers must have a minimum credit score of 620 and complete home buyer education before they can receive the loan to close on the home.
The National Council of State Housing Agencies (NCSHA) has established an information clearinghouse on tax credit monetization programs for consumers and other state agencies. To read up-to-date information on these programs, click here.
For more information, e-mail Brooke Fishel at NAHB, or call her at 800-368-5242 x8061; or contact Robert Dietz, x8285.
Tax Credit Web Site Looks at Opportunity of a Lifetime
Builders and other industry professionals can help spur home sales by referring prospective first-time home buyers to www.federalhousingtaxcredit.com. The NAHB Web site provides detailed information on the $8,000 federal tax credit for first-time home buyers included in the economic stimulus legislation signed into law by President Obama.
Consumers can use the Web site to find information on the tax credit — including a detailed question and answer section. It also includes information about other housing-related and small business measures in the legislation and a number of home-buying resources for consumers.
Spanish Version Also Online
A Spanish version of this increasingly popular Web site is also available to provide detailed information on the tax credit to Spanish-speaking first-time home buyers.
Industry professionals are encouraged to highlight either tax credit Web site when marketing to their potential first-time home buyer market.
Plan to Attend Construction Forecast Conference
Plan to attend or watch the 2009 Spring NAHB Construction Forecast Conference & Webcast on Thursday, April 23 in Washington, D.C. to get the latest facts, insights and analysis of the housing industry.
Panels of nationally recognized experts at the day-long conference will discuss economic trends, government policies, developments in the housing industry and the results from NAHB's recent surveys.
For more information and to register, visit www.nahb.org/cfc.
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