Yet Another Tax Credit

The HeRO program is a state program, but is administered locally. I called Cape's City Hall, and after not too many handoffs and "I don't know" replies, I found someone who told me that funds for 2010 have already been awarded. Jackson does not participate in the program.

A new program offering property tax relief for homeowners was announced Dec. 18 by the state of Missouri. You can read the governor's press release here: http://governor.mo.gov/newsroom/2009/Pro...

To summarize, Missouri buyers who enter into a contract to purchase a new or existing Missouri home after Jan. 1, 2010, will have their property tax for the year paid, up to $1,250, and could also be eligible for an additional $500 in tax relief if they purchase an energy-efficient home, or items to make the home more energy-efficient, such as Energy Star appliances. The total tax relief for any one family will be capped at $1,750.

Since this is a brand-new program, I haven't yet been able to find any further details.

This property tax credit is in addition to existing federal and state programs designed to spur activity in the real estate markets. Whether or not you think the government (taxpayers) should be paying people to buy houses, it amounts to an undeniable windfall for those who take advantage of the various programs. By my calculation a first-time homebuyer buying a $100,000 home and using FHA-insured financing could receive as much as $12,645, and if the recipient plays by the rules none of it has to be repaid.

Here are the programs and amounts available:

http://www.federalhousingtaxcredit.com/

Anyone who hasn't been in a coma already knows about this tax credit, but here are the basics: You qualify as a first-time buyer if you haven't owned a home at any time in the last 3 years. The tax credit is 10 pct. of the purchase price of the home, up to $8,000. You get the credit by filing your annual tax return, and it is a refundable credit, which means the IRS will send you a check.

Under current law the contract to purchase must be complete by April 30, 2010, and the transaction must close by June 30, 2010.

Cash Assistance Loan program

http://www.mhdc.com/homes/cal/index.htm

This program offers loans to be used for down payment. The loan can be up to 3 pct. of the primary mortgage amount, and does not have to be repaid if you live in the house for at least 5 years. Several banks in Cape and Jackson participate in the program.

http://governor.mo.gov/newsroom/2009/Pro...

Missouri buyers who enter into a contract to purchase a new or existing Missouri home after Jan. 1, 2010, will have their property tax for the year paid, up to $1,250, and could also be eligible for an additional $500 in tax relief if they purchase an energy-efficient home, or items to make the home more energy-efficient, such as Energy Star appliances. The total tax relief for any one family will be capped at $1,750. Since this is a new program, I don't have details beyond those given in the press release.

In addition, the Missouri Home Repair Opportunity Program (HeRO) program for 2009 offers up to $20,000 to fund certain home repairs for low and moderate income homeowners. Since this is a 2009 program and details haven't been announced for 2010, I didn't include this program in the above total. You can read about the 2009 program at the Missouri Housing Development Commission website.

http://www.mhdc.com/homes/hero/index.htm

As I learn more about any of these programs I will post updates to this topic.

As a REALTORŪ I can provide information, but can't and won't give specific legal or tax advice. You should talk with your attorney and/or tax advisor to determine how these programs would apply to you.

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