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Old 01-28-2009, 10:11 AM
 
3 posts, read 8,840 times
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Back in August we started looking to buy our first house. One of the reasons we chose to do so at this time was due to the First Time Home Buyers Credit that we would receive on our 2008 taxes.

Long story short we used a first time home buyers program since our income qualified us to get an interest rate that at the time was .5% lower than market (we are low to middle income). By the time we get to closing market rates had dropped but this programs rate stayed the same and we actually ended up with a rate that was .25% higher than market. But we were locked in and on a time schedule so we closed on time with the original rate. We didn't think it mattered.

We get our house, the slightly higher interest rate and out of pocket 5% down and closing costs. Then we get a letter in the mail stating "Thank you for using OHFA please be aware that you do not qualify for the First Time Home Buyers Credit. Have a nice day." So now here we are with an interest rate above market and no money for the needed repairs since we opted not to use down payment assistance since we thought we were getting this money.

I wish someone would have told us since we would have held off another year to save the money needed for repairs to a home. Our broker knew that we were buying now due to the credit and the great deals on homes in our area. So is there some sort of other tax deduction you get from these MRB programs that I am not seeing? All I can tell is that the investors get some sort of tax break. We got a big bill for a couple thousand and a higher than market interest rate.

At least we got a really good deal on our house.
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Old 01-28-2009, 11:00 AM
 
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So what disqualified you from taking the credit?
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Old 01-28-2009, 11:03 AM
 
Location: Casa Grande, AZ (May 08)
1,490 posts, read 3,349,273 times
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One of the rules of the credit is you cannot have used a (supposedly below market rate) mortgage bond - usually sponsored by a govt agency. The theory is you are already getting help in the form of a lower (subsidized by the govt) rate, so you shouldnt also get the credit.

Sounds like in OP case though their rate wasnt so good in the end.
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Old 01-28-2009, 11:58 AM
 
3 posts, read 8,840 times
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Quote:
Originally Posted by sh9730 View Post
One of the rules of the credit is you cannot have used a (supposedly below market rate) mortgage bond - usually sponsored by a govt agency. The theory is you are already getting help in the form of a lower (subsidized by the govt) rate, so you shouldnt also get the credit.

Sounds like in OP case though their rate wasnt so good in the end.
Yup this. The tax credit disallows for the use of Mortgage Revenue Bonds which is what funded the Ohio Housing Finance Agency First Time Home Buyers Program.

Had we not used this program we would have still gotten our loan, maybe a better rate, and the tax credit.
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