Patrick helps out first-time homebuyers
By G. Michael Dobbs
SPRINGFIELD Gov. Deval Patrick said on Tuesday that this is "a wonderful time to buy a house in the Commonwealth" as he announced a new program designed to give first-time homebuyers the immediate use of an $8,000 federal tax credit.
Patrick was in the Maple-High Six Corners neighborhood of the city to speak about the new program with Thomas Gleason, the executive director of Massachusetts Housing Finance Agency (MassHousing).
The announcement took place at 145 Florence St. where Carlos Lopez and his family bought a home from HAP. Lopez was closing on the home that day and while he is eligible for the $8,000 tax credit, he won't be able to participate in the program.
Gleason explained that MassHousing has set aside $5 million to fund the effort. Qualified buyers in the program who are working with a participating lender will be able to receive their value of their tax credit now to use as a down payment for a new home. The buyers can then either pay back the credit next year when they file their federal tax return or roll it into their mortgage and pay it back over 10 years.
To qualify, the buyers must use the home as his or her primary residence for a minimum of three years as the tax credit cannot be used for investment purposes. The home must be a one, two, three or four-family home from a seller unrelated to the buyer and the purchase must be made before Dec. 1.
Gleason emphasized there was no tax dollars used to establish the fund. MassHousing used $5 million from its profits.
Gleason and Patrick said that Massachusetts is one of about 12 states that has a program that helps first time homebuyers in this way.
Locally, Hampden Bank, the Holyoke Credit Union and the Greater Springfield Credit Union are the lenders working with MassHousing in the program. Robert Michel, the senior vice president of lending at Hampden Savings Bank, said the mortgage program offered by Hampden Bank would a "a predictable 30-year fixed rate loan."
Patrick estimated that there would be between 650 and 1,000 people statewide participating in the lending program.
Gleason said, "Home-buying as much psychological as it is financial," and predicted this program would help people feel more confident about buying a home.
While figures released Tuesday by the Realtor Association of Pioneer Valley, Inc. indicated that home sales in the second quarter in the area was on the decrease over last year by 2.3 percent, the sales figures for June indicated an overall upswing by 10.2 percent. The median price of single-family homes is still less than last year with a decrease of 10.7 percent.
Peter Gagliardi, the executive director HAP, which has built a number of homes for first-time buyers in the maple High and Old Hill neighborhoods, said the program is "a very different approach . making an opportunity of what has been a difficult time."
Gagliardi said is he hoping "lines will form soon of people who want to buy."