The Missouri Housing Development Commission (MHDC) and the federal government are making it easier and more affordable for prospective homebuyers to make the leap into home ownership. Together, MHDC and the federal government have created two programs which will help first-time homebuyers with down-payment and closing-cost assistance. These programs were created to encourage new home-buyers to purchase homes and thereby stimulate the economy. The maximum home price eligible for the credits is $289,700 and the maximum income per loan applicant or joint applicants is $85,500.

MHDC will make a second mortgage to a homebuyer at the time of closing worth up to 6% of the home purchase price or a maximum of $6,750 which may be used for a down-payment or closing costs. The loan is interest free as long as it is repaid with the Federal First Time Homebuyer Tax Credit by June 2010. If not repaid, the loan will earn a modest service fee and the homeowner must pay principle plus interest back to MHDC over a 10 year period.

Eligibility requirements for the MHDC Tax Credit Advance Loan include:

• Being a first-time homeowner

• Applying with a certified lender (like Arvest Mortgage Company, Great Southern Bank, Hometown Bank and Southwest Missouri Bank)

• Having a qualifying credit score

• Meeting income requirements

The Federal First Time Homebuyer Tax Credit is a credit worth 10% of the home purchase price or $7,500. This credit works like an interest-free loan from the federal government in the sense that it must be repaid through an increase in federal income taxes over a period of 15 years. All home purchases must have been made between April 9, 2008 and July 1, 2009 in order to qualify for this credit.

For more information contact one of the banks mentioned above.

Editor's note: The New York Times had reported that the tax credits would add $18.5 billion to the recently passed stimulus bill.

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