Down pyament assistance makes home ownership easier

Homebuyers can take advantage of a variety of tax credits to choose the perfect home.

An array of financial assistance for home purchase is available for qualified buyers in just about every income level. Of course there’s the $8,000 tax credit for first-time buyers and $6,500 for repeat buyers, which expire on June 30, but potential buyers can also look for help with the down payment.

Here’s a run down of what to expect:

The city of St. Charles– The HOME St. Charles Down Payment and Closing Costs Assistance Program helps low to moderate income purchasers to become homeowners. HOME St. Charles will make up to $10,000 available for qualified households to help with the down payment and closing costs. Down payment assistance for St. Louis County is $3,000 and Jefferson County $7,500.

Income levels apply and the sale price must be under $185,000. A mandatory nine-hour home buying seminar and a one-on-one counseling session to review finances and credit history is also required.

And there’s more. The Missouri Housing Development Commission is offering up to a $1,250 credit in property tax breaks for qualified buyers with an extra $500 thrown in if the house is energy efficient or if the buyer begins energy efficient steps within 60 days of closing. The MHDC offers more assistance, administering a number of housing programs, from purchasing a home with a First Place loan, assistance for veterans, buying property in a disaster area, foreclosed properties and home repair grants.

The federal government is also offering tax credits for energy efficient upgrades, up to $1,500 or 30 percent of the improvement cost, which includes windows and doors, insulation, roofs, air conditioners and furnaces. The tax credit is applied for either 2009 or 2010 taxes and expires on December 31, 2010.

With all of this assistance, plus a wide variety of properties to chose from, now is really the time to make that move!


Written by Myra Vandersall

Tax Credit is Extended

Good news all around today–the $8,000 tax credit for first time homebuyers has been extended to June 30, 2010. This action will encourage a robust housing market in the first quarter of 2010 and affect home prices.

The legislation also includes a $6,500 tax credit for people who currently own a home and want to buy up. Qualifications are owning and occupying a home for at least five of the past eight years. Buyers must have a signed contract in hand by April 30 and close by June 30.
And, the income limit has been increased too. The ceiling for single buyer income is now $125,000 and for married couples $225,000. Increasing the income limit will stimulate more purchases of pricier properties.

Merle Schneider, co-owner/broker and vice president of operations for SCHNEIDER Real Estate, is very optimistic about the future of the St. Charles housing market. “These new tax credits will encourage potential buyers who weren’t quite ready to purchase take another look around at properties in St. Charles.

“The first tax credit, which helped more than 400,000 homebuyers, is a success and now gives confidence to more homebuyers. This comes at a great time, ready for the spring 2010 buying and selling season.”

More positive indicators were released this week. Grant Hickman, a real estate expert with SCHNEIDER, notes that existing homes sales are up 9.4% in September, and pending home sales are also up, 6.1% in September. “These findings by the National Association of Realtors are exciting,” he says.

“We are making progress toward recovery. With the tax credit extension, inclusion of current homeowners, and the income increase, more buyers will see what a bargain St. Charles County is. We have a great atmosphere, excellent services and a wide range of housing stock. This week’s government actions will serve our area very well.”

Written by Myra Vandersall

First-time homebuyers are looking at the real possibility of a tax credit extension into 2010

Lawmakers are also considering tax credits for repeat buyers to enhance local economies

With the first-time homebuyer $8,000 tax credit set to expire at the end of November, both the Senate and House of Representatives are busy working through agreements to extend this popular program, and keep in place the loan limit for U.S.-backed mortgages at $729,750 for two years, thereby holding down interest rates.

More than 1.4 million first-time buyers have benefited from the $8,000 tax credit and that incentive helped to increase home sales in St. Charles County by 10.6% this September, compared to a year ago. St. Louis County saw an increase of 5.8% during the same period. The median home price has declined during the same time frame, by 3.4% in St. Charles County and 0.7% in St. Louis County.

To keep the up tick in housing sales going, legislators are trying to extend the tax credit incentive through June of 2010 for homebuyers who have a contract on a house by the end of April. Also proposed is up to $6,500 in tax credits for repeat buyers who have owned their home for at least five years, and an income increase to $125,000 a year for individuals and $225,000 for couples.

The Senate is expected to look at the extended tax credits next week (it’s been bundled with legislation to extend unemployment insurance) and then the House will have it’s chance to pass the legislation.

Without a doubt, the tax credits, decreased interest rates, various home ownership program assistance have helped countless qualified buyers purchase a home, and have provided more jobs for Americans in desperate need of jobs.

No doubt, this has been a rough patch for our citizens, our economy and our state of being. With extended housing incentives, we’ll be that much further to recovery and a positive outlook.

Poor Appraisals Stall Recovery

Poor Appraisals Stall TransactionsHowever, the increase in sales is less than expected because poor appraisals are stalling transactions. Pending home sales indicated much stronger activity, but some contracts are falling through from faulty valuations that keep buyers from getting a loan.”Total housing inventory at the end of May fell 3.5 percent to 3.80 million existing homes available for sale, which represents a 9.6-month supply at the current sales pace, down from a 10.1-month supply in April.Yun says the appraisal problem is serious. “Lenders are using appraisers who may not be familiar with a neighborhood, or who compare traditional homes with distressed and discounted sales,” he says. “In the past month, stories of appraisal problems have been snowballing from across the country with many contracts falling through at the last moment. There is danger of a delayed housing market recovery and a further rise in foreclosures if the appraisal problems are not quickly corrected.”

Home Sales on the Rise!

NAR: Existing-Home Sale Continue to Rise Sales of existing homes showed another gain in May, benefiting from favorable affordability conditions and a first-time buyer tax credit, according to the NATIONAL ASSOCIATION OF REALTORS ®. May’s increase was the first back-to-back monthly gain since September 2005.Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 2.4 percent to a seasonally adjusted annual rate of 4.77 million units in May from a downwardly revised level of 4.66 million units in April. Sales remained 3.6 percent below the 4.95 million-unit pace in May 2008.Lawrence Yun, NAR chief economist, expected an improvement in sales. “Historically low mortgage interest rates clearly drew buyers into the market, and housing remains very affordable even with a recent uptick in rates,” Yun says. “First-time buyers also are being drawn off the sidelines by the $8,000 tax credit, which is helping to absorb inventory.

PENDING HOMES SALES UP THREE MONTHS IN A ROW!

WASHINGTON, June 02, 2009
Record low mortgage interest rates boosted pending home sales for the third consecutive month, with some benefit now from the first-time buyer tax credit, according to the National Association of Realtors®.
The Pending Home Sales Index,1 a forward-looking indicator based on contracts signed in April, rose 6.7 percent to 90.3 from a reading of 84.6 in March, and is 3.2 percent above April 2008 when it was 87.5.
Lawrence Yun, NAR chief economist, said buyers are responding to very favorable market conditions. “Housing affordability conditions have been at historic highs, but now the $8,000 first-time buyer tax credit is beginning to impact the market,” he said. “Since first-time buyers must finalize their purchase by November 30 to get the credit, we expect greater activity in the months ahead, and that should spark more sales by repeat buyers.”

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Up to $14,999 Down Payment Assistance When Purchasing Foreclosed Property

New Program To Help Stabilize Missouri Neighborhoods

MHDC is offering a new product to help stabilize and rebuild the neighborhoods of Missouri hard hit by the housing downturn. The commission received $4.2 million from the Neighborhood Stabilization Program (NSP), which was part of the Housing and Economic Recovery Act of 2008. These funds are intended to be used for down payment and closing cost assistance for qualified buyers purchasing foreclosed property that will be used as the owner’s principal residence.


Qualified buyers may receive up to 20% of the purchase price (up to $14,999) to use for down payment and closing costs.

Buyer must use MHDC First Place Loan program for first mortgage.

NSP funds provided through a second mortgage with an interest rate of 0%, which is forgiven after five years of occupancy.

First-time and repeat buyers are eligible.

Purchase price must be discounted a minimum of 5% from the current appraised value. This must be determined by an appraisal completed within 60 days prior to making an offer on the property.

Borrower must receive eight hours of homeownership counseling from a HUD-certified counselor.


Borrower income limit is 120% of area median income, see Income & Price Limits.


Must be an owner-occupied, foreclosed property that has been without tenants for the last 12 months.

First-time homebuyers utilizing this program are also eligible to receive the $8,000 federal tax credit for first-time homebuyers if the home is purchased prior to December 1, 2009.

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Survey: Households Say Now Good Time to Buy

More than three-quarters (78 percent) of potential first-time home buyers say that now is a good time to buy a home, despite widespread concern about the economy.

Out of the 1,000 prospective U.S. first-time home buyers surveyed in early March for the CENTURY 21 First-Time Home Buyer Survey, 68 percent think now is a better time to buy than six months ago.

Prices are the driving motivation for potential first-time home buyers with more than eight of ten first-time home buyers (85 percent) saying they consider current home prices affordable and 73 percent citing that taking advantage of current prices is a major factor in their decision to buy.

Interestingly, potential first-time buyers are still split between “being willing to consider an offer now” (42 percent) and “waiting for prices to go down before they seriously consider making a purchase” (48 percent).

“Current pricing, rates and incentives, such as the First Time Homebuyer Tax Credit, provide tremendous opportunities for first-time home buyers to get into the market,” said Tom Kunz, Century 21 Real Estate president and CEO. “Our research shows that while consumers still have concerns about the future of the economy, many are actively considering their options as we move into the spring selling season.”

Among the survey’s other key findings:

• Bargains in the marketplace are providing additional options for buyers to consider. 56 percent of potential first-time home buyers are considering purchasing a foreclosed or short sale home, and 63 percent are open to purchasing either a “fixer-upper” or “as-is” home.

• When asked to rate the features that they look for when choosing a home, price is the primary consideration with 87 percent saying this feature is “very important,” followed closely by neighborhood safety (80 percent) and the condition of the home (71 percent).

• Having enough money for a down payment is a top concern of potential first-time home buyers as nearly half (46 percent) said they are “very worried” about the issue.

• Most respondents (86 percent) are in the market for single family homes.

Source: Century 21

First-time Buyers Drive February Sales

Existing-home sales increased in February, reversing losses in January, according to the latest report by the NATIONAL ASSOCIATION OF REALTORS®. However, sales activity remains relatively soft, reflecting additional layoffs and buyers waiting for housing provisions in the economic stimulus package to take effect, according to NAR.

Existing-home sales— including single-family, townhomes, condominiums and co-ops—rose 5.1 percent to a seasonally adjusted annual rate of 4.72 million units in February from a pace of 4.49 million units in January. Existing-home sales are 4.6 percent below the 4.95 million-unit level in February 2008. Seasonal adjustment factors are more volatile in winter months, but sales rates over the past few months show dampened sales activity, according to NAR.

Lawrence Yun, NAR chief economist, says first-time buyers accounted for half of all home sales last month, with activity concentrated in lower price ranges.

“Because entry level buyers are shopping for bargains, distressed sales accounted for 40 to 45 percent of transactions in February,” he says. “Our analysis shows that distressed homes typically are selling for 20 percent less than the normal market price, and this naturally is drawing down the overall median price.”

Home Buyer Tax Credit Increases Activity

NAR President Charles McMillan says home shopping activity has picked up with housing affordability at a record high.

“The number of buyers looking for homes rose 5 percent in February, and also was 5 percent above a year ago,” he says. “It appears most of the increase in buyer traffic occurred in the latter part of the month after the $8,000 first-time buyer tax credit was put in place. At the same time, mortgage purchase applications have risen, so we expect to see sales picking up around late spring.”

McMillan notes that more potential buyers are learning about the tax credit, just as the traditional spring home-buying season begins.

Existing-Home Sales Rise in February

The national median existing-home price for all housing types was $165,400 in February, down 15.5 percent from a year ago when the median was $195,800 and conditions were close to normal. The median is where half of the homes sold for more and half sold for less.

“Given the downward distortion in price comparisons due to distressed sales, it’s important for owners to keep in mind that this doesn’t equate to a similar loss of value for traditional homes in good condition,” Yun says.

Housing inventory: Total housing inventory at the end of February rose 5.2 percent to 3.80 million existing homes available for sale, which represents a 9.7-month supply at the current sales pace, unchanged from January. In the six months prior to February, the total number of homes for sale had steadily declined from a record level last July.

Single-family home sales: rose 4.4 percent to a seasonally adjusted annual rate of 4.23 million in February from a level of 4.05 million in January, but are 3.6 percent below the 4.39 million-unit pace in February 2008. The median existing single-family home price was $164,600 in February, down 15 percent from a year ago.

Existing condominium and co-op sales: increased 11.4 percent to a seasonally adjusted annual rate of 490,000 units in February from 440,000 units in January, but are 13.1 percent lower than the 564,000-unit pace a year ago. The median existing condo price was $172,200 in February, which is 18.7 percent lower than February 2008.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage edged up to 5.13 percent in February from a record low 5.05 percent in January. The rate was 5.92 percent in February 2008. Last month’s average mortgage rate was the second lowest since data collection began in 1971. Last week the rate further declined to 4.98 percent.

Regional Breakdown

Yun says a recovery in the West is much stronger than expected. “Strong sales gains in the West are led by California, where the median listing price is beginning to rise for the first time in three years,” he says.

Here's how existing-home sales fared across the country:

• Northeast: jumped 15.6 percent to an annual pace of 740,000 in February, but 14.9 percent below February 2008. Median price: $251,200, down 4.8 percent from a year ago.
• Midwest: increased 1 percent in February to a pace of 1.04 million but 14 percent lower than a year ago. Median price: $131,000, which is 7.8 percent below February 2008.
• South: rose 6.1 percent to an annual pace of 1.74 million in February but 11.2 percent below February 2008. Median price: $146,700, down 10 percent from a year ago.
• West: increased 2.6 percent to an annual rate of 1.2 million in February and remain 30.4 percent higher than a year ago. Median price: $204,600, which is 30.3 percent below February 2008.

Source: NAR

Frequently Asked Questions about First Time Home Buyer Tax Credit in Missouri

Click the $8,000 gift to download First Time Home Buyer Tax Credit Frequently Asked Questions PDF