Missouri First Time Home Buyer

 

Missouri first time home buyers now have a great new advantage when purchasing a home in 2009. The combination of the Federal First-Time Homebuyer Credit and the Missouri Housing Development Commission's (MHDC) Tax Credit Advance Loan (TCAL) program form a program that should help spur real estate sales in the state of Missouri this year.

A Great Combination

Combining these programs can make a first time home purchase much easier for those that qualify for both. Today's real estate market may be tough for sellers but for buyer's it is the best market in a generation. Home prices are at an all time low, interest rates are at rock bottom, and sellers are motivated. If you fit into the definition of a first time home buyer for the purpose of these programs this is the year to buy a home.

What Is A "First Time Home Buyer"?

You are considered a first time home buyer if you have not had any other main home during the three year period subsequent to the purchase of your home. Your main home is defined as the one that you live in most of the time. Mobile homes, houseboats, and condos all apply here. If you own a vacation home but do not live in it most of the time you may also qualify.

 

The Federal First-Time
Home Buyer Credit

The American Recovery and Reinvestment Act of 2009 includes the First-Time Home Buyer Tax Credit. The amount of the credit is up to $8000 for those that qualify.

The credit is limited to the lesser of 10% of the purchase price of the home or $8000. Closing costs such as legal and recording fees may be included in the cost of the home.

Income Limitations

The Tax Credit is limited to those within a specified income amount.

If your modified adjusted gross income is less than $75,000 (individual) or $150,000 (married filing jointly) then you will receive the full credit.

From $75,000 to $95,000 (individual) or $150,000 to $170,000 (married filing jointly the credit phases out. If your income is above $90,000(individual) or $170,000 (married filing jointly) you will not receive the first time home buyer's credit.

Other Limitations

  • The home must be in the United States
  • You cannot acquire your home by gift or inheritance
  • You cannot acquire your home from a related person
  • Nonresident aliens do not qualify
  • You cannot acquire the home from a corporation in which you own 50% or more of the stock
  • You cannot acquire the home from a partnership in which you have 50% or more interest

Repayment Issues

If you decide to sell the home, you convert it to business or rental property, or the home is destroyed, condemned, or disposed of under threat of condemnation. or for any other reason the home ceases to be your main home within 36 months you are required to repay the credit.

A few exceptions apply to repayment. If you sell your home to someone that is not related to you during those first three years the amount of repayment is limited to the gain on the sale.

If your home is destroyed, condemned, or disposed of under threat of condemnation you will not be responsible to repay the credit if you purchase a new main home within 2 years of one of those occurrences.

If you die you do not have to pay back the credit. Your spouse will, however, be responsible for 1/2 of the repayment.

This tax credit is refundable which means that even if you have a zero tax liability you will still receive the credit in the form of a refund check.

To receive this credit you must file a Form 5405 with your federal tax return.

 

Missouri Housing Development
Tax Credit Advance Loan

The Missouri Housing Development Tax Credit Advance Loan (TCAL) limitation is 6% of the home price or $6750. This can be used to cover down payment and closing costs.

The mortgage must be a 30 year fixed loan and it must be from the MHDC approved lender list. When the home buyer receives the federal tax credit proceeds they may then pay off the loan from MHDC.

If the home buyer pays off the Tax Credit Advance Loan before June of 2010 no interest will apply (only a modest service fee). If the loan is not paid off in full by June of 2010 then interest and principle payments will automatically begin and last for a ten year period.

MHDC Income Limitations

The TCAL is available to households with incomes up to $85,500. The total gross annual household income for all residents living, or intending to live, in the home, age 18 or older, is counted for this calculation.

Total gross annual household income is calculated using all sources of income and includes wages, overtime, bonuses, child support, alimony, business and investment income.

This is substantially less than the federal income limitations so be sure that you fall within the guidelines before you apply.

Tax Credit Advance Loans allow the following types of first mortgage loan in conjunction with their program and long as the lender is on their approved list.

  • FHA
  • VA
  • USDA Rural Development
  • Fannie Mae MyCommunityMortgage® loan

Good Credit Applies

Although rates and closing cost limitations are set by MHDC this program is available only to those that could otherwise qualify for the first mortgage loan with the lender.

 

More Questions?

If you have more questions about how these programs can help you or if you qualify for other available first time home buyer programs please complete the form below.

Want to find homes in your area that qualify? We are familiar with these and other available First Time Buyer Programs and will be happy to explain your options or send you more information.

First Time Buyer Programs Guide
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MissouriFirstTimeHomeBuyer.com is not affiliated with any federal or state agencies. This site is for informational purposes only. Please contact your accountant or attorney for questions related to taxes or your specific situation. For Questions or Comments about our site email us at
Info@MissouriFirstTImeHomeBuyer.com