Starting January 2009, Missouri Housing Development Commission (MHDC) will have a new product to enable first-time homebuyers to take advantage of the $7,500 federal first-time homebuyer tax credit. This program is the first of its kind in the nation.

The federal first-time homebuyer tax credit was created by Congress this summer to encourage new homebuyers to purchase homes and thereby stimulate housing markets. However, the federal tax credit has been largely ineffective. One of the primary reasons the federal credit hasn’t worked is that the homebuyer doesn’t receive the money until he receives his federal income tax refund – which may be several months after the home is purchased. 

With over 30 years experience funding mortgages for first-time homebuyers, MHDC knows that the biggest barrier faced by first-time homebuyers is acquiring money for downpayment and closing costs. As a result, MHDC created a program that allows homebuyers to receive the value of the tax credit at the time of closing.  

Get more information from a Participating Lender about the Tax Credit Advance Loan Program.

Misouri Housing Development Commission

Internal Revenue Service tax credit aid to first-time homebuyers

That means you have a perhaps once in a lifetime (certainly a once in a long-time) opportunity to buy a home at a discount and finance that home at an extremely low interest rate.  It’s known as Buying Power and today’s first time buyers have it.

Savvy buyers and investors are taking advantage of this buying opportunity.  We are already seeing multiple offers on properties that are priced well or below the market.  Take for example a property that sold for 168,000 just 2 years ago.  It was recently listed at $137,500 by the lender that foreclosed on the property.  There were competing offers.  The property needed clean-up and painting totaling approximately $3,500.  That’s a $27,000 discount from the market high of 2 years ago (more if you don’t mind painting).  Factor a low interest rate on the mortgage and there is additional savings.  If you have seen an increase in your earnings in the past 2 years you can factor that in the equation as well.  Keep in mind that this is just one example and not the normal discount you should expect in the Metro St. Louis market but I used this one to illustrate the opportunities that are available.

The truth about whether a home is a good investment.

Overnight Real Estate Rates Sink Further Inman News

Latest Housing Forecast from National Association of REALTORS

Housing Market Ready to Rebound?

Search the Metro St. Louis MLS database.  Tip: look for properties with reduced prices.

Do I qualify for a mortgage given the tightening guidelines?