Massachusetts Real Estate

At this point almost everyone knows that as part of the housing stimulus program the federal government has given 1st time home buyers a tax credit of up to $8000 for the purchase of an owner occupied home or condominium.

This tax credit has been part of the American Recovery and re-investment act.

Massachusetts however, has just introduced a 1st time buyers tax credit program that can be applied to a down payment and closing costs!

Massachusetts joins a growing number of states that allow the tax credit to be used toward the buyers down payment on the home rather than waiting till they file their 2009 taxes.

The program was introducing in a joint effort between The Massachusetts Association of Realtors (MAR) and Mass Housing. Below is a detailed description of what 1st time home buyers need to know about the program.

How it works

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

Eligibility

To qualify for the Home buyer Tax Credit Loan Program, you must

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

Other Information

• The Tax Credit Loan may be used for down payment and closing costs.
• Principal and interest payments on the Tax Credit Loan 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.

A recent study from the National Association of Realtors found that 82% of all 1st time home buyers believe that their biggest obstacle to purchasing their 1st home is coming up with a down payment. This 1st time buyers program is designed to relieve this issue in order to create more buying opportunities.

MassHousing’s home loans feature safe and affordable fixed rates and include unique benefits such as MassHousing’s MI Plus™ mortgage insurance, which will help pay the borrower’s monthly principal and interest payments for up to six months in the event of a job loss.

Mass Housing mortgages offer competitive interest rates, low- and no down payment options, and discounted rates for lower-income borrowers. As a buyer you should check with your lender to make sure they are offering this program. It should be noted that not all lenders are involved with MassHousing loans.

I commend Governor Deval Patrick and others involved with this program as it should open up additional buying opportunities and increase 1st time buyer involvement in the Massachusetts Real Estate market.

One important note that must be mentioned is that the buyer must still have a minimum of 3.5% of their own funds! The tax credit can be used in addition to the 3.5% down payment but can NOT be used to make up any part of the 3.5%.

If you are not going to buy a home using the latest Masshousing loan, the chart below summarizes the current Federal 1st time home buyers 8k tax credit program. Remember a 1st time home buyer is considered someone who has not owned a home in the last three years.

One of the best resources that I have seen on the new 1st time buyers tax credit comes from The National Association of Home Builders website. It is located here at the frequequently asked questions about the home buyer tax credit.

_________________________________________________________________________________________________________

About the Author: The above Real Estate information on 1st time home buyer tax credits was provided by Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-435-5356.

Thinking of buying your 1st home in Metrowest Mass? I have a passion for Real Estate and love to share my Real Estate expertise!

For Metrowest Massachusetts Real Estate and homes see Metrowest MA Real Estate. Want to have MLS access to beat other buyers to your dream home? Sign up with no obligation at my MLS Property Finder Site.

I service the following towns in Metrowest Massachusetts: Hopkinton, Milford, Upton, Southboro, Westboro, Ashland, Holliston, Mendon, Hopedale, Medway, Grafton, Northbridge, Uxbridge, Franklin, Douglas, and Framingham MA.

Click here to view Bill Gassett's Real Estate profile.

Subscribe in a reader

SUBSCRIBE TO MY METROWEST HOMES BLOG via email.

Building lasting relationships by helping people move in and out of Metrowest Massachusetts for the last 23 years.