American Recovery and Reinvestment Act funding creates opportunities
SANTA FE- Governor Bill Richardson today joined with the New Mexico Mortgage Finance Authority to urge New Mexicans to take advantage of programs that offer historic levels of assistance to first-time homebuyers.
"During this time of unprecedented economic and social challenges we are seeing that there are indeed opportunities for working New Mexicans to realize the American dream of owning a home," said Governor Richardson. "New federal stimulus money, existing affordable homebuyer programs and low housing prices have come together to make this a great time to buy a home in New Mexico."
The Governor and the MFA are working to get the word out about a terrific incentive for first time homebuyers offered through the American Recovery and Reinvestment Act. If you purchase a home between January 1, 2009 and December 1, 2009, you can receive a federal tax credit for 10 percent of the home's purchase price, up to $8,000.
The tax credit is refundable and homebuyers never have to pay it back. First-time homebuyers can claim the credit on your 2010 tax return. Or, if they have already purchased a home or plan to do so this year, they can file an amended 2009 tax return to claim the credit. To qualify, homebuyers must be purchasing a home for the first time or must not have owned a home for the past three years. They have to live in the home for at least 36 months.
Single filers with adjusted gross incomes of up to $75,000 and joint filers with incomes up to $150,000 are eligible for the full tax credit. Filers who earn up to $20,000 more than that will qualify for smaller credits.
The Governor also announced a new MFA program for first-time homebuyers who cannot afford a down payment. The new program works in conjunction with the tax credit to help those who qualify. New Mexico was one of the first three states in the country to offer this kind of opportunity.
Called the Tax Credit Loan Program, it allows homebuyers to take $6,500 of the tax credit and turn it into a down payment loan that is interest-free until June 30, 2010. People can buy a home using $6,500 from MFA and repay it when they received their federal tax credit. The Tax Credit Loan must be used in conjunction with an MFA first mortgage, which is a safe, 30-year fixed-rate mortgage loan. It is available statewide to households with incomes up to $65,550.
"These exciting programs will help families across the state buy homes or find affordable housing," added the Governor. "Because of great organizations like the Mortgage Finance Authority, we have projects that are qualified and ready to go, and we can more forward quickly. I would like to commend the Lieutenant Governor and everyone with MFA for their tireless efforts to provide quality, affordable housing for New Mexicans."
Finally, the Governor announced that New Mexico will receive nearly 14-million dollars to restart construction on rental properties for very low income households and households with special needs. That means that more than 25 affordable housing projects throughout the state that were stalled because of the slumping economy will be back on track to build quality, affordable housing for New Mexicans.
Many affordable housing developers depend on selling federal tax credits, which are issued by MFA, to finance their projects. But when the value of federal tax credits began eroding last year, equity investors withdrew from the market. Since they couldn't sell their credits, developers were left with gaps in their project funding.
The Tax Credit Assistance Program, called "T-CAP", will allow the Mortgage Finance Authority to provide needed gap funding to developers that were awarded tax credits in 2007 and 2008. And when the 2009 tax credits are awarded in May, those projects will also be eligible for this funding.
For more information of how New Mexico will benefit from the American Recovery and Reinvestment Act go to www.recovery.state.nm.us.