Some Missourians may have gotten an early Christmas present when the state’s Housing Development Commission on Friday voted 7-1 to approve a plan that gives home buyers at certain income levels a tax break.
Families making under $98,560 per year who purchase a house next year are eligible for a $1,250 property tax refund. They could also receive another $500 reimbursement if they invest in energy-saving appliances or home improvements.
The one commissioner who voted against the refund chided his fellow commissioners for “getting into the welfare business for people who make less than $100,000 a year,” reported the Columbia Daily News. But the plan had the backing of Gov. Jay Nixon, whose administration favors a battery of government-funded subsidies to spur home buying, new construction, and energy-saving renovation.
For example, the Commission has committed nearly $100 million in federal stimulus money for 38 low-income housing projects statewide, according to the Springfield Business Journal. One such project is called Silver Brook, a 32-unit development for which Affordable Homes Development Inc. got $1.8 million. This project—which includes 1,900-square-foot, three-bedroom homes that will be rented to families at or below 60% of the county’s median income, with a no-payment-down purchase option—should be completed in the spring of 2011, the newspaper reported.
The state’s Department of Natural Resources’ (DNR) Energize Missouri Housing Initiative will start accepting grant proposals early next year for the millions it is prepared to dole out for its “low-income weatherization assistance” program, which is also being financed by federal stimulus dollars. “We’re pleased to have the additional stimulus money to better serve the low-income individuals in the state,” Valerie Johnson, a DNR consultant, told KTOV last week.
The above-mentioned tax rebate, which the Commission approved, is projected to cover property taxes for between 9,000 and 11,000 families whose incomes don’t exceed a certain income level, which varies by location. Greg Spurgeon, the Commission’s single-family housing administrator, tells BUILDER that in Kansas City, for instance, the income ceiling for eligibility would be $98,560; in St. Louis, $95,060; in Jefferson County, $91,980; in Columbia, $88,200, and the rest of the state $81,600. Rebates will be made on a first-come, first-serve basis.
This program, known as HOPE (for home ownership purchase enhancement), is being paid for out of a $15 million reserve held by the Commission from balances accrued from its mortgage-loan management.
When it approved the tax break, the Commission also added $5 million to its program that provides assistance—in the form of a second mortgage of 3% of the loan amount—to first-time buyers to cover down payments and closing costs. According to the Commission’s website, the price limits for this program are between $258,690 and $316,177 for a single-family house, and between $291,280 and $355,000 for a duplex.
Spurgeon says that the first-time buyer assistance is an ongoing program that the state has funded primarily through the Commission’s sale of low-interest bonds to create home loan funds.
John Caulfield is a senior editor for BUILDER magazine.