Few taking advantage of Missouri home-buyer tax break

Thursday, June 24, 2010 | 10:26 a.m. CDT; updated 9:11 a.m. CDT, Friday, June 25, 2010

ST. LOUIS — The state of Missouri has $15 million to give away to home buyers.

But few are taking it.

A tax break program launched in January by the Missouri Housing Development Corp. has drawn surprisingly little interest so far. Of $15 million in MHDC reserves set aside as rebates for most homeowners, only $1.2 million had been claimed as of Friday.

The program, called Homownership Purchase Enhancement, or HOPE, offers up to $1,250 to Missourians who buy a home in 2010, based on income guidelines. An additional $500 is available for energy improvements. When they created it in December, Gov. Jay Nixon and Treasurer Clint Zweifel said it would help spur sales and ease the burden on homebuyers.

But while more than 9,000 homes have been bought just in the St. Louis region this year, only 828 HOPE claims have been approved statewide, with 469 now being processed. That leaves about $13.2 million still in the pot.

Greg Spurgeon, who oversees the program for MHDC, acknowledged that things haven't gone quite as briskly as planned.

"It definitely started out slow," he said. "It took some time to get the word out."

But activity has picked up. MHDC received 135 applications last week, he said, the most yet.

Still, it's unclear what, if any, impact the program is having on home sales. It was loosely modeled on the $8,000 federal tax credit, a much bigger, better-publicized program that many housing economists say has had limited results.

Meanwhile, the state's budget woes have deepened, and, to conserve funds, Nixon has hit the brakes on affordable housing tax credit programs run by MHDC.

Still, the agency has a bunch of money to give to home buyers, for purchases that close by Aug. 31. And Spurgeon says interest in the program is growing.

"Word is starting to spread out there," he said.

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