Since time is running out to take advantage of the first time home buyer tax credit, we thought we would tell you a little about the credit and the unique opportunity that Missouri is providing to assist with down payment and closing costs. Even if you already own your home, your family and friends may be eligible for the credit so feel free to pass this information along.
The Housing and Economic Recovery Act of 2008 established this credit for first time home buyers. Originally, the credit was only up to $7,500 and was similar to a no-interest loan in the fact that it had to be repaid over a 15 year period. The American Recovery and Reinvestment Act of 2009 expanded this credit to $8000 and eliminated the repayment clause as long as the purchaser owns the home as the primary residence for at least three years after the purchase.
Here are some of the requirements in order to claim this credit on your 2009 tax return:
- Applies to purchases that close before December 1st, 2009.
- The home must be the taxpayer’s principal residence.
- Taxpayers may claim 10% of the purchase price up to $8,000 for married couples filing jointly and $4,000 for married individuals filing separately.
- A taxpayer is considered a first-time homebuyer if you (or your spouse if you are married) did not own any other main home during the three year period prior to the date of purchase.
- The credit begins to phase out for taxpayers whose adjusted gross income is more than $75,000 or $150,000 for married couples filing jointly.
Recently, Missouri was the first state to launch a Tax Credit Advance Loan program allowing buyers to use the credit toward their down payment and/or closing costs. Rolled out on January 14th by the Missouri Housing Development Commission, this program makes a second mortgage to the home buyer at closing worth up to 6% of the purchase price up to $6,750 to assist with the down payment and closing costs. The home buyer files for the federal tax credit on their 2009 tax return and uses the credit refund to pay back the advance. As long as the buyer pays back the advance no later than the deadline of June, 2010, there is no interest due. In order to take advantage of this assistance, homebuyers must qualify for their home mortgage loan through a MHDC certified lender for an FHA, VA or USDA Rural Development loan.
For more information on the tax credit or for a list of MHDC certified lenders, please contact us at www.SunsetSalesTeam.com.
We look forward to continue to work with you on your real estate needs. Call us toll free at 1-866-804-8361 and don’t forget our websites at www.SunsetRealtyServices.com and www.SunsetNightlyRentals.com. You can also text or call me at 417-699-1070.