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Winooski, Vermont - February 22, 2009
A three-bedroom, one-bathroom house priced at $151,900 is one of many homes Regina Mahony is considering. "I definitely want something in an older, more established neighborhood," she said.
Mahony is buying her first home, and she may get some help from the government to do just that. The federal economic stimulus package includes an $8,000 tax credit for first-time home buyers. "Any benefit will help a lot because it's expensive," she said. "It's a big purchase."
Realtors say Vermont's housing market has not seen the slump other parts of the country have, but this tax credit could provide a boost. Julie Lamoreaux of Hickock & Boardman Realty in Burlington says winter can sometimes be a slow time for real estate, but her phone is ringing off the hook. "I definitely think this is encouraging people," Lamoreaux said. "Now there's too many signs. Everything comes in threes. We've got the low rates, the huge inventory, and now this stimulus package, which has a short window so you need to cash in on it quickly to take advantage of it."
The credit applies to homes purchased before December 1, 2009. Purchasers must have an adjusted gross income of no more than $75,000, or $150,000 for couples filing a joint return. But realtors say people can qualify as a first-time home buyer even if they have owned a home before -- just not a principal residence in the past three years.
"A lot of people don't even know this exists," said Heather Myott, an advisor for Coldwell Banker Mortgage. "They don't know this part of the bill was passed, they don't know there's something out there that affects them."
Under a law passed in 2008, home buyers could get $7,500 toward purchasing their first home, but that had to be paid back over 15 years. The credit in the current stimulus package is an $8,000 credit that is applied to a buyer's tax return and does not have to be repaid. "This is free money to people," Myott said. "The way they had it set up before, it was basically an interest-free loan people had to pay back and we didn't see a lot of movement from that. People were interested, but even if they were buying for the first time they didn't take that into consideration. Now they want this money."
Of course, to get the credit, buyers first must qualify for the mortgage. "Income is obviously one thing, we need to make sure people have enough to support the loan," Myott explained. "But at the same time, it's how have you repaid obligations in the past. If we're looking to extend money to someone, we want to make sure they've been paying things on time."
Regina Mahony says the tax credit would help, but she still wants to be cautious about what she can afford, and make sure she doesn't get in over her head, putting a roof over her head.
Kate Duffy - WCAX News
