Three New States Join Tax Credit Monetization Bandwagon
Florida, Illinois and Massachusetts are the latest states to implement programs to help monetize the $8,000 tax credit and enable first-time home buyers to use it for downpayment and closing costs.
They join 13 other states with existing programs: Colorado, Delaware, Idaho, Kentucky, Missouri, Nebraska, New Jersey, New Mexico, Ohio, Pennsylvania, Tennessee, Texas and Virginia.
Among the provisions of the newest state initiatives:
- The Homebuyers Opportunity Program from the Florida Housing Finance Corporation is being administered through the 67 county agencies and 53 Community Development Block Grant (CDBG) entitlement cities, rather than through the state agency. Eligible applicants can receive up to $8,000 in loan assistance, which is expected to be paid back by the borrower upon receipt of their first-time home buyer tax credit refund.
- The Home Start program through the Illinois Housing Development Authority provides an interest-free loan of up to 3.5% of the purchase price of the home, maxing out at $6,000. The loan is restricted to Home Start 30-year mortgages and the borrower must contribute 1% of the purchase price to the transaction. There is a $300 administrative fee for the program.
- MassHousing in Massachusetts will loan first-time home buyers up to 10% of the price of the home or $8,000, whichever is less. Only borrowers who use a MassHousing mortgage qualify, and they must pay a $300 administrative fee, which will be credited back to their first mortgage if the loan is repaid by June 1, 2010.
NAHB economists estimate that the $8,000 first-time home buyer tax credit, with the help of the state housing finance agency monetization programs, will spur nearly 200,000 additional home sales over the life of the program, including purchases by move-up buyers who are able to buy a new home as a result of selling their existing residence to a first-time tax credit buyer.
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.
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