Massachusetts approves advance on home buyer tax credit

First time home buyer credit can be used for closing costs and down payments via a loan from the state.
Governor Patrick says these loans will help home buyers achieve the stability of homeownership and stimulate economy.

Certain first-time home buyers in Massachusetts will be eligible for an advance on the $8,000 tax credit, giving them much needed closing costs up front, under a new program recently unveiled by Governor Deval Patrick.

According to the new plan, the state will loan the $8,000 to eligible borrowers who buy a home before Dec. 1 and finance it through the state’s affordable housing bank, MassHousing. The interest free loans need to be repaid by June 1, 2010.

MassHousing estimates it will be able to help between 650 to 1,000 peo ple by the end of November, using $5 million set aside for the program.

“These loans will both help prospective home buyers achieve the comfort and stability of homeownership for their families and also stimulate the Commonwealth’s economy through increased home sales,’’ Patrick said.

Massachusetts joins more than a dozen states nationwide that have developed their own bridge loans under a plan announced by the US Department of Housing and Urban Development in late May.

At that time, federal officials said home buyers could apply their tax credit toward new home purchases when financing through the Federal Housing Administration or through state and local housing finance agencies.

Borrowers with an FHA-insured loan are still required to provide a 3.5 percent down payment before they can use the tax credit for any additional payment or closing costs.

Under the Massachusetts program, the $8,000 can be used to cover an entire down payment. Borrowers can purchase a one- to four-family home and must use it as a primary residence.

“This article adopted from the Bosto Globe, written by Jenifer B. McKim”

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Congress passes monster housing bill

A shot in the arm to the U.S. housing market

A shot to the arm of the U.S. housing market

President Bush signed into effect one of the most robust housing legislation bills in history yesterday. Designed to give another shot in the arm to the country’s ailing housing market, this bill is MASSIVE.

Some of the highlights of this bill are tax credits for first-time home buyers, mandatory refinancing options for certain individuals, increases to fed-backed jumbo mortgage allowances in certain markets such as Boston, increases of property tax breaks for home owners, and $4 Billion in federal aid to the primary mortgage providers Freddie Mac and Fannie Mae, in order to support, rehabilitate, and stabilize low-income housing projects in certain areas. So, yes, this bill is HUGE.

Perhaps one of the most amazing aspects of the bill is the mandatory refinancing options. In order to help those homeowners facing foreclosure, $300 billion in funding will be available to the FHA in order to help mortgagees whom are locked into upside-down, high interest  mortgages, allowing them to refinance into more affordable loans. An estimated 400,000 sub-prime and other high-cost mortgages will be eligible for this program. This is unprecedented. Under the bill, mortgagors will have to accept losses on new loans and which can be no more than 90 percent of a home’s current market price. What a country! In return, the borrowers will eventually have to forgo a portion of any future appreciation when they sell. How about that?

It is a monumental day for the slumping housing market in the U.S. Hopefully the impact of this ground breaking bill will be felt immediately and help to stabilize those markets that have been hit hardest by the recent mortgage meltdown and subsequent real estate downturn.