Two weeks ago MassHousing announced a new loan program that allows first-time home buyers to “monetize” the $8,000 Federal homebuyer tax credit for downpayments and closing costs. The announcement was made during a press conference held in Governor Patrick’s office.
MAR served as a resource for the Patrick/Murray administration and MassHousing in the creation of this new program. Almost immediately after the $8,000 tax credit was signed by the President in early 2009, MAR began working with MassHousing to explore ways that the credit could be used for a downpayment.
Now Massachusetts joins a small but growing number of states that have developed a unique way to allow buyers to access the credit at a time when it can be most helpful in the home buying process. In fact, a recent NAR study found that 82% of would-be home buyers believe that saving enough for a downpayment is still their biggest obstacle to homeownership.
The MassHousing Homebuyer Tax Loan Program is accessible for homebuyers who are using a MassHousing loan to purchase their first home and apply for the loan program through their lender. The loan is used to cover closing costs or as part of the downpayment. In 2010, the homebuyer claims the $8,000 tax credit on their 2009 federal tax return and may repay the MassHousing tax credit loan at no interest if repaid by June 1, 2010 or otherwise, the loan is amortized over the next 10 years, at the same interest rate as the first mortgage.
It’s also important to remind first-time home buyers that in order to qualify for the $8,000 tax credit or MassHousing’s loan program, transactions must close by Dec. 1. For more information on the 2009 First-Time Homebuyer Tax Credit and the MassHousing Loan Program.