First time home buyers are eligible for a tax credit of 10% of the purchase price up to $8000 on a home purchased between January 1, 2009 and November 30, 2009. This tax credit does not have to be paid back. A first time home buyer is considered anyone who has not owned a home in the last three years. To qualify for the full tax credit a married couple may make up to $150,000 and a single person up to $75,000 per year.

For Montanans there may be even better news. A group of Builders, Realtors, The Montana Board of Housing and Neighbor Works Montana has managed to get an unanimous vote to amend House Bill 645 in the Senate Finance Committee to create the Welcome Home Program. House Bill 645 is the Legislature’s bill to allocate federal economic stimulus funds. It is anticipated that House Bill 645 will be scheduled for Senate floor action this week.

The Welcome Home Program would appropriate $2 million to serve as security for any bridge loans offered by private lenders or qualified nonprofits. This money would be placed into a Contingent Loan Acquisition fund to leverage any private dollars committed to the program. The program is designed to be revenue neutral. The unspent portion of the $2 million would revert back to the state general fund on August 1, 2010. The $2 million should open up about $15 million in private capital to help as many as 3,000 first time home buyers receive $5,000 for down payment and closing costs. These home buyers would then pay back the bridge loan after receiving the tax credit from an amended 2008 tax return.

First time home buyers must participate in a “home buyer education course” to decrease default rates. They must also contribute $1,000 to the closing of a home purchase in conjunction with the bridge loan, including a fee of $500 that will cover the cost of administering the program. They will receive a $150 bonus when the bridge loan is repaid.  Click here to check out the Montana Legislature.