Montco Real Estate

A few weeks ago, we heard about the possibility of using the First Time Buyer Tax Credit toward a downpayment.

Pennsylvania Housing Finance Agency’s Tax Credit Advance Loan Program (TCA) provides an interest free loan of up to $6,000 to use towards downpayment and/or closing costs for those qualified through PHFA.

• The maximum loan amount is $6,000 for newly constructed homes and $5,000 for existing homes, with a minimum loan amount of $500.

• Buyer must invest a minimum of $1,000 of their own funds for conventional loans.

• If TCA is repaid by June 30, 2010, the borrower pays no interest for the loan.

• Any portion of the TCA not repaid by June 30, 2010, becomes a ten year loan at the same interest rate as the PHFA first mortgage; with monthly payments beginning on August 1, 2010.

• You must be a first-time homebuyer.

• You must fall within the Federal First Time Homebuyer Tax Credit income guidelines and PHFA’s income and purchase price limits.

• Cannot be combined with other PHFA downpayment and closing cost assistance programs.

• The homebuyer files for the Federal First Time Homebuyer Tax Credit with their 2009 federal income tax return and uses their tax refund to repay the Tax Credit Advance Loan.

• Loan must close prior to December 1, 2009 (and be occupied, in the case of custom construction).

• Funding is limited; therefore, loan availability is on a first come, first served basis.