2009 has shaped up as an extremely good year to be a first-time homebuyer. Mortgage interest rates have dropped to extremely low levels, providing affordability in many cases where it didn’t exist previously. Not only that, but almost every state in the United States has a first-time homebuyer program, designed to assist people seeking their first homes, with reduced interest rates (often lower than market), low down payment requirements, and, typically, additional programs to assist in the down payment process.
Another key element in sparking the interest of buyers this year is the $8000 tax credit enacted earlier this year for those who make their first purchase by December 1, 2009. The credit can be claimed on either the 2008 or 2009 tax return, according to the IRS. The purchase of the home must come first, of course.
If you’ve already filed your tax return for 2008, you can file an amended return in order to claim the credit once you’ve made your purchase. You would use Form 1040X to file an amended return.
I am located in Connecticut, so I am most familiar with the program here, which we find to be an excellent vehicle for assisting those seeking their first home. The Connecticut Housing Finance Authority (www.chfa.org) is the state agency responsible for administering the plan. As I write, the interest rate in the Homebuyer Mortgage Program is 5 per cent.
This program is actually available, as well, for those who have owned previously but are purchasing within a specific targeted area. These are locations in which the State of Connecticut has deemed it appropriate to promote home ownership. The targeted areas also afford borrowers a reduced interest rate at this time, at 4.75%.
Down payment assistance is available, in the form of a second mortgage at the same interest rate as the first mortgage. There are income limitations as well, though targeted areas have higher thresholds.
As for the remainder of the United States, some states have curtailed activity, while some have shut down their programs entirely. California has suspended most of its first-time homebuyer programs, though some specialized programs do remain. Illinois, Nebraska, Oregon and Wisconsin have all suspended their programs as well.
For the remainder of the states that have programs, you can contact them as follows to determine your eligibility.
Alabama: Alabama Housing Finance Authority (www.ahfa.com)
Alaska: Alaska Housing Finance Corporation (www.ahfc.us)
Arizona: Arizona Housing Finance Authority (www.housingaz.com/azhfa)
Arkansas: Arkansas Development Finance Authority (www.arkansas.gov/adfa)
Colorado: Colorado Housing Finance Authority (www.chainfo.com)
Delaware: Delaware State Housing Authority (www.destatehousing.com)
Florida: Florida Housing Finance Corporation (www.floridahousing.com)
Georgia: Georgia Department of Community Affairs (www.dca.state.ga.us)
Hawaii: Hawaii Housing Finance and Development Corporation (www.hawaii.gov/dbedt/hhfdc)
Idaho: Idaho Housing and Finance Association – Ida Mortgage (www.ihfa.org) – not a state agency
Indiana: Indiana Housing & Community Development Authority (www.in.gov/hcda)
Iowa: Iowa Finance Authority (www.iowafinanceauthority.gov)
Kansas: Kansas Housing Resources Corporation (www.kshousingcorp.org)
Kentucky: Kentucky Housing Corporation (www.kyhousing. org)
Louisiana: Louisiana Housing Finance Agency (www.lhfa.state.la.us)
Maine: Maine State Housing Authority (www.mainehousing.org)
Maryland: Maryland Department of Housing and Community Development (www.mmprogram.com)
Massachusetts: Mass Housing (www.masshousing.org)
Michigan: Michigan State Housing Development Authority (www.michigan.gov/mshda)
Minnesota: Minnesotat Housing Finance Agency (www.mnhousing.gov)
Mississippi: Mississippi Housing Corporation (www.mshc.com)
Missouri: Missouri Housing Development Commission (www.mhdc.com)
Montana: Montana Board of Housing (http://housing.mt.gov)
Nevada: Nevada Housing Division (www.nvhousing.state.nv.us)
New Hampshire: New Hampshire Housing (www.nhhfa.org)
New Jersey: New Jersey Housing and Mortgage Finance Agency (www.njhousing.gov)
New Mexico: New Mexico Mortgage Finance Authority (www.nmmfa.org)
New York: New York State Housing Finance Agency (www.nyhomes.org)
North Carolina: North Carolina Housing Finance Agency (www.nchfa.com)
North Dakota: North Dakota Housing Finance Agency (www.ndhfa.org)
Ohio: Ohio Housing Finance Agency (www.ohiohome.org)
Oklahoma: Oklahoma Housing Finance Agency (www.ohfa.org)
Pennsylvania: Pennsylvania Housing Finance Authority (www.phfa.org)
South Carolina: South Carolina Housing Finance and Development Authority (www.sha.state.sc.us)
South Dakota: South Dakota Housing Development Authority (www.sdhda.org)
Tennessee: Tennessee Housing Development Authority (www.thda.org)
Texas: Texas Department of Housing and Community Affairs (www.tdhca.state.tx.us)
Utah: Utah Housing Corporation (www.utahhousingcorp.org)
Vermont: Vermont Housing Finance Agency (www.vhfa.org)
Virginia: Virginia Housing Development Authority (www.vhda.com)
Washington: Washington State Housing Finance Commission (www.wshfc.org)
Wyoming: Wyoming Community Development Authority (www.wyomingcda.com)
Washington, D.C.: Department of Housing and Community Development (www.dhcd.dc.gov)
