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Tax Credit Loan Program - The "Prefund" Program
The HMFA’s First-Time Home Buyers Tax Credit Loan Program (TCLP) or “Prefund” program provides a 0% loan to Agency First-Time and Urban Target Area Home Buyers to pay downpayment and/or closing costs. Home Buyers must meet all of the requirements of the Agency’s Home Buyer Program and be eligible for the credit as permitted by the federal law establishing the credit and the guidance provided by the IRS in the General Instructions that accompany IRS Form 5405.
To participate in the Tax Credit Loan Program (TCLP) the Home Buyer must:
- be an approved Agency Home Buyer Program Applicant,
- have a household income that does not exceed the Agency’s TCLP maximum permitted income,
- buy a residence that is eligible under the Agency’s Home Buyer Program,
- apply for a TCLP loan on or after November 23, 2009,
- have signed a contract to purchase a home on or before April 30, 2010,
- must close on the home on or before June 30, 2010, and;
- must pledge to apply the refund received from the Federal First-Time Home Buyer Tax Credit toward the repayment of the TCLP loan.
Non-first-time home buyers who qualify for the tax credit will be eligible for the TCLP if purchasing a residence in an Urban Target Area. Military personnel who are eligible for the home buyer tax credit extension permitted by federal law may apply for TCLP during the term of the extension which is currently through April 30, 2011. The TCLP loan will not exceed $5,000 ($4,000 in the case of married filing separately or $3,250 in the case of a non-first-time buyer purchasing in an Urban Target Area) and will be secured by a second mortgage. The Borrower will pledge to apply the refund received from the First-Time Home Buyer Tax Credit toward the repayment of the TCLP loan.
General Eligibility Requirements: Individuals only. Corporations are not permitted to act as Borrowers. Borrowers purchasing properties located in the Statewide Areas or in *Urban Target Areas must be first-time home buyers to be eligible for the TCLP loan. At the time of loan closing, no other residential properties may be owned.
(*) To determine if your proposed house is within an Urban Target Area (UTA), visit the Smart Growth Locator at www.njlocator.gov, follow the instructions and look up UTAs by using the UTA list.
Further detail is available on our Fact Sheet and Income Limits Sheet or call 1-800-NJ-HOUSE.
MUST CLOSE ON HOME PURCHASE BEFORE JUNE 30, 2010
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