COLUMBIA — Most folks buying their first home in 2009 can get a stimulus tax credit of up to $8,000. Generally that package, while attractive, doesn't include a visit from a United States senator.
For Travis and Jessica Peterson, it did. In fact, Sen. Claire McCaskill arrived in their new home before the rebate check did.
For more information on the advance loan program, call 1-800-246-7973.
The senator swept in to promote the tax credit and the Missouri Housing Development Commission's first-in-the-nation advance loan program.
"Missouri is the only state in the union that has figured this out so far," McCaskill said.
Normally, people who bought their first house after they filed their 2008 taxes would have to wait until their 2009 tax return to see the credit. With the advance loan program, Columbia residents who make less than $88,200 and pay a $350 fee can get up to 6 percent of their home's price (the tax credit itself covers 10 percent, up to $8,000) in cash at closing time and pay it back, interest free, when they receive their 2009 tax return.
If homeowners don't pay the loan back right away, it simply rolls into their loan payment as part of a second mortgage.
Homebuyers must apply for the credit before the first week of December 2009. First-time homebuyers who have purchased a home in the past month and a half and buyers who haven't owned a home for at least three years are also eligible.
Jessica Peterson, 26, is a pediatric social worker at University Hospital. She said the couple didn't do too much to prepare for Sen. McCaskill's made-for-TV visit and the accompanying small-scale media invasion.
"We just picked up some of the clutter," she said. "We still had a few boxes we hadn't unpacked, so we hid those."
The Petersons bought their house before they filed their taxes this year, and thus can look forward to the imminent arrival of their rebate check. They didn't know about the rebate program until after they had selected a home and did not apply for an advance loan.
The first weekend in April, they left the manufactured home they'd been living in behind and, four years into their marriage, moved into a one-story house at the end of an northeast Columbia cul-de-sac. They plan to use some of the rebate money to build a fence in their backyard and to save the rest on behalf of their first child; Jessica is 15 weeks pregnant.
The rebate was an unexpected, but welcome, surprise.
"It might have been tight for a while with the baby coming and all," Jessica said.
Travis Peterson, 31, runs a Bobcat of St. Louis dealership in Columbia. He urges other people in his situation to purchase a home while they qualify for the credit.
"Go out and take advantage of that credit," Travis said. "Buy, buy, buy! That'll get us turned around again faster than anything."
Sen. McCaskill agreed, calling it "one of the most important tax credits in the stimulus."
"We have an incredible group of houses for sale at great prices," she said.
"Missouri is the envy of the nation," Carol Van Gorp, CEO of the Columbia Board of Realtors, said. She said her colleagues in other states were "just drooling" over Missouri's advance loan program.
Van Gorp's organization started tracking the numbers of purchasers taking advantage of the credit in mid-March. In March, nine of the 125 homes sold by Columbia Realtors, or 7.2 percent, applied for the tax break. So far in April, that number is up to 16 of 113 sold, or more than 14 percent.
Sheri Radman, president of the Columbia Board of Realtors, said new owners generally make up between 25 and 30 percent of the market. She said that contracts initiated last year and lack of public education might explain the gap between that number and the 14 percent of owners who applied for the credit in April.
Van Gorp said local realtors are already feeling the positive effects of the federal incentive.
"It's really helping. We closed the month of March within one house of last year," she said. "It's working."
Elizabeth Mendenhall of the Missouri Association of Realtors said she'd received calls from people across the country interested in Missouri's advance loan program.
"You can't underestimate the fact that we have the only program in the nation," she said.
Mendenhall said the expected the program to help "remove some of the doubt" for first-time homebuyers, rather than to create a new class of buyers just looking for a rebate.
"When people decide they want to move, there's usually a life-changing event" like the Petersons' expected child, Mendenhall said.
"Eight thousand dollars is a lot of money to anybody, but especially to the first-time buyers," Radman said.