Home Finance eNews
02.12.2010
Federal First Time Homebuyer Tax Credit and CHFA
Can a borrower get the new CHFA FirstStepsm or CHFA FirstStepsm Plus loan and still be eligible for the federal First-Time Homebuyer Tax Credit? Yes!!!On February 17, 2009, in Denver, President Obama signed the American Recovery and Reinvestment Act (ARRA). This bill had substantial changes to the federal First-Time Homebuyer Tax Credit, including eliminating the 15-year repayment obligation of the Borrower which was part of the 2008 Housing and Economic Recovery Act (HERA).
However, and most pertinent, Section 1006 (e) of ARRA also eliminated the prohibition of the Borrower's access to the federal First-Time Homebuyer Tax Credit if their loan was financed with Mortgage Revenue Bonds (MRBs.) The language reads:
Division B - Tax, Unemployment, Health, State Fiscal Relief and Other Provisions, Title I - Tax Provisions, Subtitle A -- Tax Relief for Individuals and Families, Part I General Tax Relief, Sec. 1006 -- Extension of and Increase in First-Time Homebuyer Credit; Waiver of Requirement to Repay.
"(e) Removal of Prohibition on Financing by Mortgage Revenue Bonds. -- Section 36(d), as amended by subsection (c)(2), is amended by striking paragraph (2) and by redesignating paragraphs (3) and (4) as paragraphs (1) and (2), respectively. (f) Effective Date. The amendments made by this section shall apply to residences purchased after December 31, 2008."
The CHFA FirstStep and CHFA FirstStep Plus programs are funded with MRBs. Many ARRA or federal First-Time Homebuyer Tax Credit-related websites have not been updated to highlight this specific provision of the law; however, the actual IRS Form 5405 has been updated to reflect this change. If you want to read the complete ARRA bill as written, click here:
Don't let your first time homebuyers miss out on this great opportunity for both a tax credit and a great mortgage loan product. You must attend a webinar training to take advantage of the CHFA FirstStep/FirstStep Plus programs. For a complete training schedule and RSVP information, please visit our website.
Please contact us with any questions.
303.297.7376 or 1.888.320.3688 Denver
970.241.2341 or 1.800.877.8450 Western Slope
Thank you,
CHFA Home Finance
