Deadline Nears for First-Time Homebuyer Tax Credit and State's Down Payment Advance...

Deadline Nears for First-Time Homebuyer Tax Credit and State's Down Payment
Advance Loan Program

SPRINGFIELD, Ill., Sept. 3 /PRNewswire/ -- The end is nearing for the
first-time homebuyer tax credit. In order to qualify, homebuyers must close on
or before midnight on November 30th of this year to qualify for the tax
credit. The National Association of REALTORS(R) estimates close to two million
first-time buyers will have taken advantage of the $8,000 tax credit this
year, stimulating an additional 350,000 home sales.

Qualified Illinois first-time homebuyers have a double advantage utilizing the
tax credit with the Illinois Housing Development Authority's new Illinois Home
Start Loan program. The Home Start program offers a 30-year fixed rate
amortized loan insured by the Federal Housing Administration (FHA) along with
a zero-interest, short-term advance loan of up to $6,000 to use towards a down
payment on their home purchase and to be paid back when they earn their tax
credit in 2010.

"We are hearing many first-time homebuyers are generally unaware of the tax
credit and the Illinois Home Start program so we are working to increase
awareness about how these programs can work together to help more first-time
homebuyers realize the dream of homeownership," said Pat Callan, president of
the Illinois Association of REALTORS(R). "Potential homebuyers are in a
position of strength in terms of financing into a secure, mortgage option
program at a time when we are seeing improved affordability conditions,
historically low long-term interest rates and solid inventory levels."

While the federal tax credit deadline officially ends at midnight on November
30, consumers should be aware that the closing, not the contract signing, must
take place before the expiration date.

"Ideally, we are encouraging buyers to consider contract signings by late
September or early October to comfortably meet the IRS tax credit deadline, as
the buying process can take time to proceed to closure." said Callan.

The tax credit is equal to 10 percent of the cost of the home, up to a maximum
of $8,000. Only properties used as a principle, single-family residence --
including condos and townhouses -- qualify and there are income guidelines.
People earning more than $95,000 (or $170,000 if filing jointly) cannot claim
the credit. The tax credit does not have to be repaid if the buyer stays in
the home for three years.

Home Start, the Illinois Housing Development Authority (IHDA) loan program,
offers first-time homebuyers a 30-year mortgage insured by the Federal Housing
Administration (FHA) and the second option of also taking out a Home Start
Advance Loan, a zero-interest, short-term loan that can be used toward a down
payment and then repaid when buyers receive their tax credits. The maximum
loan amount under the Home Start Advance Loan is $6,000 or 3.5 percent of the
purchase price, whichever is greater.

Other terms of the Home Start Advance Loan include:

-- Homebuyers must qualify and secure a Home Start 30-year loan to
qualify
for the Advance Loan option.
-- Homebuyer education must be completed through a HUD-certified
counselor.
-- Veterans and active duty service personnel don't have to be
first-time homebuyers to qualify.

-- The tax advance must be repaid in full by June 30, 2010, or it becomes
a
10-year amortizing loan at 0.5 percent above the interest rate on the
Illinois Home Start 30-year loan.

"There are many great buying opportunities for first-time buyers with property
prices having been adjusted to meet current conditions," Callan said.

Consumers can also learn more about Home Start at www.ihda.org or the
first-time homebuyer tax credit at www.YourIllinoisHome.com, a consumer site
developed by the Illinois Association of REALTORS(R). While there, consumers
can also check IAR's tax credit clock to get an up-to-the-minute update on how
much time is left for using the tax credit.

SOURCE Illinois Association of REALTORS

Mary Schaefer of Illinois Association of REALTORS, +1-217-529-2600