Friday, July 17, 2009

Homebuyer Tax Credit Loan Program

Homebuyer Tax Credit Loan Program

Great news for first time home buyers that want a larger downpayment. MassHousing is now offering a loan program that allows first-time homebuyers to use the $8,000 federal tax credit as part of their downpayment or to cover closing costs, rather than waiting until they file their 2009 taxes. Combine this with the downpayment assistance programs that most towns have available for qualified buyers, and you could have over $15,000 given to you towards your downpayment!

How it works

  1. Homebuyers who are using a MassHousing loan to purchase their first home apply for the loan program through their lender
  2. The loan is used to cover closing costs or as part of the downpayment
  3. In 2010, the homebuyer claims the $8,000 tax credit on their 2009 federal tax return
  4. The homebuyer then repays the MassHousing tax credit loan
    • No interest is charged if the loan is repaid by June 1, 2010
    • Otherwise, the loan is amortized over the next 10 years, at the same interest rate as the first mortgage


To qualify for the Homebuyer Tax Credit Loan Program, you must

  • Be a first-time homebuyer using a MassHousing loan
  • Meet income limits and purchase price guidelines
  • Purchase a one- to four-family home before November 30, 2009
  • Use the property as your primary residence for the life of the loan

Other Information

  • Loan may be used for downpayment and closing costs
  • Principal and interest payments are deferred until June 1, 2010
  • There is a $300 application fee. If the tax credit loan is repaid by June 1, 2010, the borrower will receive a $300 credit toward the principal of their first mortgage
  • Maximum tax credit loan amount is $8,000 or 10% of the home's purchase price, whichever is less

For more information on the Hombuyer Tax Credit loans, call me, Jim Armstrong at 978-394-6736 or contact Mass Housing at 888.843.6432.

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