Mass. to let home buyers borrow on $8G tax credit
By Jay Fitzgerald
Wednesday, July 15, 2009 - Added 13h ago
Jay Fitzgerald has been a journalist and blogger for years. He's now the general economics reporter for the Boston Herald.
Massachusetts thinks it’s found a faster way to get an $8,000 federal tax credit into the hands of first-time home buyers.
Gov. Deval Patrick announced yesterday a new state program that would effectively let first-time home buyers borrow against the federal tax credit for home down payments or for closing costs.
The program, which will be run by the quasi-public agency MassHousing, would loan potential buyers, via a second mortgage, the $8,000 if they get their primary mortgage through the agency.
No interest would be charged through June 1, 2010, or roughly the same time buyers would get their tax-credit money from the federal government. If borrowers don’t repay their loan with the tax-credit funds, they’ll be charged at a mortgage-level interest rate.
Patrick said there’s no need for buyers to wait for the federal money to use it to their advantage.
“The truth is it’s a good time to buy a home,” Patrick said.
The $5 million program will run through Nov. 30.
Earlier this year, Congress approved the tax credit as part of the massive $787 billion economic stimulus package backed by President Obama - and it’s quickly become one of the recovery act’s more popular programs.
State officials say the new program might be able to help up to 1,000 people struggling to finance the purchase of a home.
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