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REQUEST FOR HRA ACTION <br />Director Approval: <br />�� <br />Date: 04-21-09 <br />Item No: 10 d. <br />Agenda Section: <br />Action Item <br />Item Description: Discussion of Federal First Time Homebuyer Tax Credit Loan <br />Program <br />1.0 Requested Action <br />Staff would like to discuss finds of information related to implementing a Federal First <br />Time Homebuyer Tax Credit Loan Program. <br />2.0 Background <br />2.1 The Roseville HRA discussed on March 31, 2009 a loan program that would <br />allow First Time Homebuyers to access the Federal First Time Homebuyer Tax <br />Credit Program to use for down payment and closing costs for single family <br />properties in Roseville, MN as allowable under the American Recovery <br />Reinvestment Act (ARRA) legislation. The legislation permits a homebuyer to <br />receive a maximum of $8,000 or 10% of the purchase price, subject to restrictions <br />related to the borrower's income, first time homebuyer status, and tax liabilities. <br />The Tax Credit is only available for homes purchased between January 1, 2009 <br />and (closed by) December 1, 2009. <br />2.2 The Board asked that member Elkins look into the concept of providing a short <br />term loan that would be paid back by the Federal First Time Homebuyer Tax <br />Credit and forward information to staf£ Member Elkins was given information <br />by the Minnesota Housing Finance department regarding other states that are <br />offering a similar program but that the State of Minnesota was not going to at this <br />time. <br />2.3 A few states are offering a short term loan for the Federal First Time Homebuyer <br />Tax credit when used in conjunction with First Time Home Buyer Loan funds that <br />each state has. With the states offering the lst and 2"d mortgage on the property <br />they are able to be more flexible with the underwriting of loan to value and debt <br />to income ratio. Conventional first mortgage lenders would underwrite a second <br />mortgage loan as debt that would reduce the amount of what a first mortgage <br />buyer would qualify for. <br />2.4 Staff did discuss the potential of putting a loan program in place and have the <br />Housing Resource Center (HRC) administer the loan. The HRC did not <br />recommend putting a program in place for such a short period of time. In <br />addition the HRC would not be able to implement a program for us until July 1, <br />RHRA_ Discussion of a Federal Tax Credit First Time Home Buyer Loan Program (04-21-09) - Page 1 of 1 <br />