I went to the monthly meeting of the Iredell County Developer’s Council today in Mooresville and enjoyed hearing Rep. Rick Killian speak about various issues he’s working on in the NC legislature. One that he is working particularly hard for is a North Carolina version of the federal first time home buyer’s tax credit that pays up to $8,000 after the closing of a primary home purchase (click HERE for more info). He’s proposing a tax credit that would apply to not just first time home buyers, but rather all buyers (although I’d guess just for primary homes). The credit, up to $10,000, would be paid out over several years. Don’t know how successful he’ll be given the sorry state of our state’s budget, but if that kind of investment would spur home sales, that may be a good solution to the economic crisis we’re experiencing now which, in turn, would increase tax revenues and help get us out of the state budget rut.
The $8,000 first time home buyer tax credit is great, but if you can’t raise the money for a down payment and closing costs, that tax credit is really not available to you. Columnist Ken Harney published a piece last Saturday (see HERE) about several states coming up with ways to advance the $8,000 to a buyer, then be paid back when the feds sent the tax credit check. In the meeting today, I asked Rep. Killian if he is aware of any similar work being done in the NC legislature. I’m not sure he understood the concept, but his answer was that this was “not realistic.” Since Mr. Harney reported that 10 states are doing it, I guess it is realistic under the right circumstances. I communicated later with our Realtor Association Government Affairs Director, Elizabeth Barnhardt, who said she’d get the information about the other states’ work in this area to Rep. Killian.
Great info on the tax credit. I’m glad the IRS / federal government finally removed the repayment requirement. Now if we can get them to extend the credit beyond the November 09 cutoff, we’d be even better positioned for a housing upswing. People who are unable to make a large down payment can opt for the FHA loan … the FHA recently announced that you can actually use the credit as your down payment. I’m not sure about the stipulations on this, but it sounds like a good way to get some first-time buyers off the fence.