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Down payment now, tax credit later using JumpStart
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JumpStart loan can be paid off with home buyer tax credit.
Take advantage of the first time home buyer tax credit when you buy instead of waiting until when you file your 2009 tax return.
Today, Colorado Housing and Finance Authority (CHFA) and Ed Perlmutter, Congressman representing Colorado's 7th District, kicked off CHFA's JumpStart, mortgage program.
The program is designed for Coloradans to take advantage of the first time home buyer federal tax credit - fruit of the American Recovery and Reinvestment Act.
Perlmutter said, “Through the CHFA JumpStart program, we are bringing the benefits of the economic stimulus plan to Colorado.”
“First time home buyers will be able to leverage the future benefit of the federal tax credit by working with CHFA to access the dollars needed to buy a home today.”
CHFA JumpStart will provide qualified first time home buyers with a 30 year fixed interest rate first mortgage, along with a second mortgage in the amount of 3.5 percent of the home or $6,000, whichever is less. The second mortgage money may be used for down payment and closing costs.
This JumpStart second mortgage has very special benefits:
1. A zero percent (0%) interest rate.
2. No payments due through June 30, 2010.
3. The first time home buyer federal tax credit is used to pay off this second mortgage before the June 30, 2010 deadline.
What happens if the second mortgage is not paid off in full by the June 30, 2010 deadline?
The second mortgage adjusts to an 8 percent interest rate with a 10 year term.
“We are in a buyers’ market. The silver lining to the housing decline is homes are more affordable,” said Karen Harkin, CHFA Director of Home Finance.
“CHFA JumpStart does exactly what it says, it gives home buyers a jump-start on buying a home today, and in building equity in their homes.”
How does the first time home buyer credit work?
Congress is allowing a maximum $8,000 tax credit for first time home buyers who qualify, purchase and close on a home between Jan. 1, 2009 and Nov. 30, 2009. Taxpayers can claim 10 percent of the price of their home up to the $8,000 maximum against their 2008 federal tax returns this year, or on their 2009 federal tax returns. The credit is adjusted according to gross income of more than $75,000, or over $150,000 for joint filers.
“In these tough economic times, these changes will enable thousands of people to achieve the dream of homeownership in a responsible manner, as well as help jump-start the sale of homes in our housing market,” said Perlmutter.
How can you get a JumpStart? Call your mortgage lender now to find out if you qualify.
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