What happens if you're trying to give away $15 million and no one takes it?
That's the question facing Missouri housing officials, who early this year launched a tax credit program designed to spur home sales. They took $15 million from reserve funds at the Missouri Housing Development Corp. and offered up to $1,250 to most people who buy a home in 2010, until the money runs out.
It appears that will be awhile. As of Friday, according to MHDC, only about $1.2 million has been issued.
“It definitely started out slow,” said Greg Spurgeon, single family housing administrator for MHDC. “It took some time to get the word out.”
As of Friday, MHDC had approved 828 tax breaks, and had another 469 that were filed but awaiting processing. Yet in the first five months of the year, more than 9,000 single-family homes were sold in the Missouri part of the St. Louis region alone, according to data compiled by the Post-Dispatch.
Not all of those would qualify – to be eligible, buyers must earn no more than $95,060 – but many would. And if you've already bought a house, it's not too late. Homebuyers have 60 days after closing to file for the credit, said MHDC spokeswoman Andi Benson.
The program was loosely modeled on the $8,000 federal tax credit for first-time homebuyers, which most experts say had a moderate impact on home sales last fall, and a smaller one on sales this spring.
MHDC's program, which took effect in January, was backed by Missouri homebuilders, Gov. Jay Nixon and Treasurer Clint Zweifel. But it met with questions by some housing advocates, who wondered if the agency's reserves might be better spent in other ways, and with opposition from Lt. Gov. Peter Kinder, who called it a “half-baked proposal” and cast the lone vote against it at MHDC's December board meeting.
Now the state faces well-documented budget shortfalls and Nixon and Kinder are at odds over the slowdown of affordable housing tax credits that MHDC controls.
But the HOPE program, as it's called, is becoming more popular. MHDC received 135 applications last week, Spurgeon said.
“The pace has definitely picked up,” he said. “Word is starting to spread out there.”
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