Missouri officials have just made it a little bit easier for home buyers this year.
Last year, Missouri (MO) was the first state to set up a program which allowed first time buyers to use most of the federal housing tax credit money for their down payment.
On Friday, Missouri did it again.
Missouri Property Tax Credit for Buyers
On December 18, 2009, a program was approved by the Missouri Housing Development Commission (MHDC) to help eligible MO home buyers pay for the first year of property taxes (up to $1250) and provide an incentive for purchasing energy efficient homes or appliances (up to $500).
Governor Jay Nixon’s news release explained:
Under the new program, eligible Missouri families who enter into a contract to purchase a new or existing Missouri home after Jan. 1, 2010, would have their property tax for the year paid, up to $1,250. In addition, to support the creation of “green jobs” in Missouri, families would 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 would be capped at $1,750.
Details on how the program will work are pretty sketchy at this point, but the article did note:
Funds for the tax-relief and energy-efficiency initiatives will be available after Jan. 1, 2010, on a first-come, first-served basis. Forms and affidavits will be part of the documents executed by the purchaser at the closing of the sale to prevent fraudulent use of funds. Additional receipts and documentation will be required for proof of energy-efficiency upgrades.
An article that the Governor’s office put out on November 24, 2009 prior to approval of the program gave additional information:
Who is eligible?
Income eligibility is based on previously adopted MHDC guidelines. Depending on the county of the home sale, household income limit guidelines for low to moderate income persons or families approved by MHDC last spring range from $58,300 to $98,560. These grants are for owner-occupied purchases only.
When would it start?
If approved by the MHDC at its next meeting on Dec. 18, 2009, funds would be available for contracts entered into after Jan. 1, 2010, on a first-come, first-served basis.
Where is the funding for this program coming from?
The funding would come from a reserve fund held by MHDC earned through successful management of mortgage loans made to low- and medium-income individuals and families. These reserve funds are not from general revenue, nor subject to the legislature’s appropriation process.
How much of the property tax bill could be paid?
Eligible homeowners could have up to $1,750 of their property tax bills paid. According to the State Tax Commission, the average residential real estate tax bill for a Missouri homeowner is $1,160. An income-qualified individual or family is eligible to receive $1,250 or the amount of their first year’s real estate tax bill, whichever is highest, when they purchase a new or existing residential home. An income-qualified individual or family can enhance this base amount, up to $1,750, if they purchase an energy-efficient new home or make energy efficient improvements to an existing home that is purchased. These improvements must be made prior to closing or within 60 days of closing.
How do Missourians apply for these funds?
Forms and affidavits will be part of documents executed at the home sale closing. Additional receipts and documentation will be required for proof of energy efficient improvements.
What energy-efficiency upgrades would be eligible for the additional incentive?
Eligible improvements would include installing high-performance windows, house wraps, programmable thermostat controls, water-efficient toilets and faucets, and energy-efficient water heaters, lighting and appliances; sealing heating and air conditioning ductwork; caulking; insulating water heater pipes; increasing the R-value of insulation in crawl spaces and attics; and conducting on-site energy efficiency inspections and tests, including a blower door test, which tests the overall energy efficiency of the house, and a duct blaster test, which tests how much the air ductwork leaks.
The article also pointed out that Missouri is recovering from the economic recession faster than most other states:
In a report earlier this month that identified Missouri as one of 11 states most likely to recover from this recession the quickest, Moody’s listed Missouri’s diverse economy and stable housing prices as one of the main reasons for a potentially quick economic recovery in comparison to other states.
Reasons to Buy Now vs. Waiting for the Spring Market:
This new tax incentive is only one of many reasons that MO buyers who are considering buying a home should do it now rather than wait until spring or summer.
- Federal government tax credit for eligible 1st time buyers (up to $8,000) and repeat buyers (up to $6,500) only applies to buyers who have an accepted contract by April 30, 2010 and close by June 30, 2010
- Missouri’s program (which will pay up to $1250 towards the first year’s property taxes and up to $500 towards energy efficient homes, improvements or appliances) has a limited amount of money and will eventually run out (the MHDC foreclosure down payment program ran out of money pretty quickly)
- Interest rates continue to be at historically low levels, but at some point will start rising again
- The current housing market offers prices on homes that are much lower than they were only a few years ago
- Given the requirement of an accepted contract by the end of April 2010 for the federal tax credits, more sellers will be coming on the market in the winter rather than waiting until spring…giving buyers more homes to choose from over the winter than they will get later in the year
With all of these time sensitive incentives encouraging St. Louis buyers to purchase a home between January and April 2010, sellers who were planning to list their home in spring need to get on the market as soon as possible. If you were thinking about selling and haven’t yet chosen a real estate agent, I would welcome the opportunity to meet with you and discuss your home sale.
PDF Possibly Related Posts:
- Missouri Home Buyers ~ Get $1750 after Closing from the State of MO
- Housing Tax Credit for 1st Time Buyers & Current Homeowners
- MHDC Program Gives Down Payment Money to Foreclosure Buyers
- Missouri Residents can use the First Time Buyer Tax Credit at Closing to Cover Costs
Email This Post
