MassHousing Homebuyer Tax Credit Loan Program
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What is the Homebuyer Tax Credit Loan Program?
The Homebuyer Tax Credit Loan Program is a MassHousing program that allows first-time homebuyers who are eligible for the $8000 federal first-time homebuyer tax credit to use the credit as cash when they buy their house. Homebuyers can use the credit for their down payment or closing costs.
Without the tax credit loan, homebuyers cannot use the credit until 2010, when they get their 2009 federal income tax refunds.
The first time homebuyer tax credit is a refundable federal tax credit of up to $8000 for first-time homebuyers who buy a home before December 1, 2009. Homebuyers claim the tax credit on their 2009 federal income taxes. For more information about the credit, see What is the first-time homebuyer tax credit?
The Homebuyer Tax Credit Loan Program is run by MassHousing, a state agency that works to increase affordable housing in Massachusetts. The loan program is part of the Massachusetts Recovery Plan.
Am I eligible?
You can get the MassHousing Homebuyer Tax Credit Loan if:
- You are eligible for the federal first-time homebuyer tax credit
- You pay for your house with a MassHousing loan from a MassHousing-approved lender
- You meet the MassHousing income limits (135% of area median income)
- You buy a one to four-family home before December 1, 2009
- You buy the home from a seller who is not related to you
- You use the house as your principal residence for the life of the MassHousing loan
For more information, see Homebuyer Tax Credit Loan Program Description on the MassHousing web site.
What benefits will I get?
If you qualify for the Homebuyer Tax Credit Loan Program, you will get these benefits:
- You get an advance on your first-time homebuyer tax credit that you can use for your down payment or closing costs
- The loan amount is 10% of your purchase price, up to a maximum of $8000
- Payments on the loan are deferred until June 1, 2010
- You do not have to pay any interest on the loan if you repay it by June 1, 2010
- If you do not repay the loan by June 1, 2010, the loan is amortized over the next ten years at the same interest rate as your first mortgage
The loan repayment date is set at June 1, 2010 to give homebuyers time to file their 2009 income taxes and get their tax credit refunds from the IRS.
How much does it cost?
You must pay a $300 application fee for the MassHousing Homebuyer Tax Credit Loan Program. If you repay the tax credit loan by June 1, 2010, you will get a $300 credit towards your first mortgage principal.
You do not have to pay any interest on the tax credit loan as long as you repay it by June 1.
How do I apply?
To apply for a MassHousing Homebuyer Tax Credit Loan, call the MassHousing Homeownership Department at 888-843-6432.
Useful links
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Homebuyer Tax Credit Loan Program
Information about eligibility, benefits, and how to apply for the Homebuyer Tax Credit Loan Program, including a Program Description and Fact Sheet. From MassHousing.
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Homebuyer Tax Credit Loan Announcement
Governor Patrick's announcement of the Homebuyer Tax Credit Loan Program, July 14, 2009.
MassHousing Homebuyer Tax Credit Loan section last updated on 7/27/09
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