Ro Troia

First Time Homebuyer Tax Credit Paid In Advance

If you’re not taking advantage of the first time homebuyer tax credit – you should be!  Lower interest rates, high inventory and low sale prices are continuing to make this a buyers real estate market.  Not only are we seeing great deals in home sales, but first timers are getting that tax credit we are all hearing about.  Buy before December 1st and receive $8,000 at tax time.  Luke Mullins from US News explains that 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.  Read more.

With the inability to have a downpayment for closing, what good is the tax credit?  There are several ways to receive the payment “in advance”.  CHFAhas the JumpStart program in Colorado.  If you qualify, you can take out a JumpStart second mortgage loan to help with downpayment and closing costs.  The second mortgage loan is for the lessor of 3.5% of the first mortgage loan or $6,000.  There is an administrative fee of $350. 

$250 of CHFA’s $350 admin fee will be paid back if the second loan is paid by June 2010.  The incentive is to actually use the tax credit to pay back the loan.  Therefore, the interest rate on the second mortgage will increase to 8% with a ten year term if not paid off by June 2010.

For those who don’t pay off their loan, CHFA urges buyers to use the CHFA HomeOpener Plusmortgage product which offers down payment and closing cost assistance at competitive market interest rates within a 30 year loan term.

Take advantage of being a first time homebuyer in Boulder County and NOW… when the market is perfect for you.  Let me help you find a lender who knows about these programs and we’ll get started looking at homes today!

Tags: Tags: advance, boulder county colorado, chfa, interest rate, jumpstart program, lender, mortgage, real estate, realtor, tax credit

This entry was posted on Sunday, August 9th, 2009 at 2:23 pm and is filed under Buyer's Corner, Colorado Round Up, First Time Buyers, Market Conditions. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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