90-Day Down Payment Assistance Program
*** Update 10/4/2009: According to recent lenders that I have spoken to in Austin, this program has ended. Please contact your lender for clarification. ***
You may have already heard about the $8,000 first-time homebuyer tax credit, but have you heard how you can apply that to your down payment when you close on your home?
Thanks to the Texas Department of Housing, we now have the 90-Day Down Payment Assistance Program to assist borrowers with their down payment and closing costs!
The program allows the first-time homebuyer to receive the tax credits as a second lien at the time of the home closing. The buyer then files an amendment to their tax return to receive the money to pay off the second lien. The guidelines are explained below:
Tax Credit Provision:
1. Federal tax credit to first-time homebuyers equal to 10% of the purchase price of home up to $8,000.00
2. For homes purchased on or after January 1, 2009 and before December 1, 2009.
3. Tax credit available only to first-time homebuyers or those that have not owned a home in the last 3 years.
4. Single homebuyers can earn no more than $75,000 per year; married taxpayers can earn no more than $150,000/year.
5. Borrower must live in home for 3 years to receive tax credit; otherwise, credit received is due as taxes for the year of sale.
6. Borrowers may file for tax credit with 2009 IRS tax return or by amending their 2008 return.
90-Day Down Payment Assistance Program:
1. This program created the 2nd Lien Down Payment Assistance Program that advances down-payment and closing cost assistance.
2. To qualify, eligible borrowers must meet the federal first-time homebuyer requirements:
First-time homebuyers purchasing a home - new or resale, that will be used as a principal residence;
Includes single family detached homes, attached homes like townhouses and condominiums and manufactured homes;
First-time homebuyer is a buyer who has not owned a principal residence during the 3 year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse;
Home purchase must occur on or after 1/1/09 and before 12/1/09. The purchase date is the date when closing occurs and the title to the property transfers to the homeowner;
Income limit for single taxpayer is $75,000.; and limit is $150,000 for married taxpayers filing a joint return;
Proceeds may be used for down-payment, closing costs or pre-paids;
Amount of Assistance Available - 5% of the total mortgage amount (including MIP) up to a maximum of $7,000.00;
Borrowers must complete a pre-purchase homebuyer education course.
There is a limited amount of money for this program ($5 million) so if you are thinking of homeownership, now is the time to act if you would like to take advantage of these benefits!
Also, you need to know that most home loans are taking about 45 days to close. In order to make it to the December 1st deadline, you will need to be under contract for a home by mid-October. I suggest starting sooner in case of delays!
To take advantage of this program and the ability to get into your first home with no ‘out-of-pocket’ expense, call or email me today!
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