Now here is an idea I wish they’d adopt here in Salt Lake City. The Missouri Housing Development Commission is helping first-time home buyers by advancing, in cash at closing, $6,750 of the $7,500 federal tax credit for first-time home buyers to use as their down payment. With FHA this is enough to purchase a $225,000 home.
I was pondering this out loud to whoever would listen to my crazed mumblings last year when the tax credit was first announced: “How is giving someone $7,500 back in April of this year (or April of 2010 if the home is purchased this year) going to help someone with no down payment get a house today? They still don’t have a down payment today.”
Well the folks in Missouri got it right. This is granted as an interest-free loan that the home purchaser repays when they get their tax return, or they can repay it over 10 years with interest.
How has it worked? This month 30 buyers have reserved their share of this money and the commission has enough set aside for 590 buyers.
This helps to spur the economy (at least locally) because it puts back to work all those associated in any respect with the housing industry, right down to the Home Depot employee.
For Salt Lake City, UT today’s average mortgage rates are as follows:
30-year fixed: 5.125%
15-year fixed: 4.75%
Conforming Jumbo 30-year fixed: 5.750%
FHA 30-year fixed: 5.00%