First time home buying made possible with the help of an $8,000 tax credit

COLUMBIA -- Many Americans are feeling the effects of the current economic crisis. And that, lawmakers say, has kept potential first time home buyers sitting on the fence.

But a tax credit, aimed at jump starting home sales, is helping some in our area buy their first house.

Travis Peterson and his wife just bought their first home in Columbia. It's the American Dream. And theirs was made possible with the help of an $8,000 tax credit.

"It's just been a blessing that credit came along," Peterson said. "And I'm so glad our realtor actually told me about it."

The Peterson's were able to buy their house, in part, because of the stimulus bill signed by President Obama, which includes a tax credit for first time home buyers.

"This is $8,000 that you can get back from the federal government to use to buy a house for the very first time in your life," said Sen. Claire McCaskill (D-Mo.) "To get your piece of the American dream."

The tax credit is designed to boost the economy by encouraging home buying, and so far it seems to be working. So far this year, 388 homes have been sold in Columbia. Of those, 6.5 percent were made possible thanks to the tax credit.

McCaskill says it's somewhat of a Catch-22 for home buyers since the credit can only be claimed after buying a house.

First time buyers, like the Peterson's, can often afford monthly mortgage payments but sometimes need help with up front fees, like down payments and closing costs.

To help, the Missouri Housing Development Commission (MHDC) is fronting the $8,000 tax credit to first time home buyers in an effort to jump-start local sales. So far, Missouri is the only state to offer this type of program.

"Missouri is the envy of the nation," said Carrol Van Gorp, with the Columbia Board of Realtors. "And they just are drooling over the program."

The money will be loaned out interest free and will be repaid back when the homeowner gets their federal tax credit.

"Our clients love it," said Jessica Kempf, a Columbia realtor. "I mean, it's actually making them jump off the fence and purchase something."

Quick Details:

* The federal tax credit is only available for first homes purchased between Jan. 1 and Dec. 1, 2009.