Your Government Wants You to be a Homeowner

 

Your federal state and local government want you to be a homeowner.  If you have not owned a home in the past three years, there are three programs that can help you achieve your dream of home ownership.  All programs require the property be owner occupied and to be able to qualify for a Government backed FHA Loan.  You will need a minimum of $1000 to move into your new home with both programs and have fair credit.

 

The first program is the Delaware State Housing Authority Bond Program.  To qualify for the program, a family of 3 or more can not earn more than $85,445 per year and the purchase price of the home must be less than $456,054 in New Castle County.  In Kent County, the income limits are $77,625 and the purchase price of $444,189.  Limits are slightly lower for 2 person families.  The great thing about the bond program is that its grant money.  It does not have to be repaid as long as you follow the program guidelines (call for details).  You can receive up to 3% of the purchase price to be used for the down payment.  So when purchasing a $300,000 home that is $9,000 in free money that does not have to be paid back! 

 

The second program is the Delaware Housing Partnership (DHP).  The DHP program has similar requirements to qualify but, this program will lend you up to $10,000 to be used toward closing costs.  This money does not require a monthly payment and only has to be paid off when you sell, move, or pay off your first mortgage.  You will also be required to take home ownership classes.

 

Combine these two programs with the transfer tax credit for first time home buyers and you could receive $21,250 based on a $300,000 home.  To receive this transfer tax credit, you must be purchasing your first home, the three year rule does not apply and some municipalities do not participate.

 

The last program is the federal tax credit for home buys who have not owned a home in the past three years.  The credit can be for up to $7500 or 10%  of the purchase price, whichever is smaller.  To qualify for this program, you must purchase a home and go to closing on after April 9, 2008 and before July 1, 2009 and can be taken on taxes filed during 2008 or 2009.  Even buyers who bought a home before the bill passed, but after April 9, can claim the credit.  Unlike tax deductions which only offset taxes by lowering taxable income, the tax credit is a straight dollar for dollar deduction of your tax bill.  So a buyer who would ordinarily pay $8,000 in taxes would pay just $500.  It is also refundable, which means if a buyers taxes are less than $7500, the government will send you a check for the difference.  For example, if a couples tax bill is $3000, the government will refund all of that plus $4500.  That will give you a tax refund of $7500 when you file your taxes.  Unlike DSHA this tax credit has to be repaid.  Buyers must start paying back the tax credit within 2 years at a rate of no more than $500 per year for 15 years. When the house is sold, any outstanding balance will be paid from the profits; if it is sold at a loss, then the difference will be forgiven.  The tax credit is paid back without interest, it is like the government giving you an interest free loan for 15 years.  This program cannot be used with the DSHA and DHP programs. 

 

Programs may change periodically so please click on the following link to be pointed to the Delaware State Housing Authority website.

 

Each of these programs have its unique eligibility requirements, so please feel free to contact Henry Eckhardt of Long & Foster's Main Street Team at (302) 285-0600 for details or call:

 

Tracie Baichi of Prosperity Mortgage at

(302) 285-0600