First-time homebuyers could see an $8,000 tax credit sooner rather than later if a proposal to pay the credits upfront is passed as part of the state budget.
Rep. Gary Aubuchon, R-Cape Coral, is trying to get the proposal included as part of the budget before the current legislative session ends April 30.
“It’s something I’m working on, certainly with the House leadership,” he said.
The credit is part of the $787 billion federal stimulus package signed into law by President Barack Obama in February. Currently, first-time homebuyers must wait to receive their tax returns to get the credit.
In the proposal being pushed by the Florida Association of Mortgage Brokers and other real estate groups, the Florida Housing Finance Corporation — the state’s affordable housing authority — would be directed to provide down payment assistance to first-time homebuyers, who would then pay back the credit from their tax return.
Valerie Saunders, president of the Florida Association of Mortgage Brokers, said the upfront credits would help move existing homes through the market faster.
“From our perspective, it’s a great way to help get rid of the backlog,” she said.
Saunders added that the proposal would widen the pool of eligible borrowers in a time of ever-tightening credit.
“It’s a big part of the problem, you need more money as a down payment. The credit standards are still being tightened,” she said.
Because the housing crisis that resulted from the subprime mortgage debacle led to bank failures and over-leveraging in the financial sector, fixing the housing market, or at least finding the bottom, is seen by many as the first step in curing the ailing economy locally and nationally.
“One of the keys for our economy in Southwest Florida to recovery is we have to use up all the excess homes in our marketplace,” Aubuchon said.
He and fellow legislators, however, are in the midst of developing a budget that has also seen losses from the free-falling economy.
Saunders said Realtors encountered apprehension from some legislators when the subject of upfront credits was broached.
“They understand the reasoning behind it with the budget,” she said.
Still, Aubuchon is optimistic the proposal will be part of the budget.
“Over the next week I hope we can get that language in there,” he said.