MEDIA RELEASE
Contact: Brandon Laster, Public Information Officer
(816) 759-6692

Release No. 98-08-14
Aug. 20, 1998

RURAL HOMEBUYERS OFFERED TAX BREAK

[Troy, Missouri] - The Missouri Housing Development Commission expanded the Mortgage Credit Certificate program to allow any first time homebuyer to receive a federal income tax credit when they buy a home in a rural area.

During their regular monthly meeting today, the Commission opened the program to anyone purchasing a home in a rural area. The program had previously been limited to those purchasing newly constructed homes in a rural area.

The federal tax credit allows rural homebuyers to reduce their income tax liability through a credit of 25 percent of the mortgage interest paid per year, or $2,000, whichever is less. Eligible borrowers include homebuyers whose total gross annual household income does not exceed $44,300 for a one to two person household or $50,945 for households with more than three people. The income levels are established using all sources of income for every person age 18 or older.

The only exception in this program is for those persons buying or building a house in the Federally Targeted Areas. An applicant purchasing a home in a target area does not have to be a first-time home buyer and the income and sales price limits are higher: $53,160 for a one or two person household and $62,020 for a larger household.

Targeted areas include specific locations within the following counties: Adair, Barry, Benton, Boone, Camden, Cape Girardeau, Dunklin, Hickory, Howell, Jasper, Laclede, Marion, Morgan, Oregon, Pemiscot, Pettis, Ripley, Scott, Texas, Wayne & Wright. Targeted areas are established where 70 percent of the families have an income that is 80 percent or less of statewide median income.

The purchase price of a home financed through this program cannot exceed $121,340 for those within the targeted area or $99,270 within other rural area.

The following metropolitan areas/counties are not eligible for the program: Columbia (Boone county), Joplin (Jasper and Newton), Kansas City (Cass, Clay, Clinton, Lafayette, Jackson, Platte & Ray), Springfield (Greene, Christian & Webster), St. Joseph (Andrew and Buchanan), and St. Louis (Franklin, Jefferson, Lincoln, St. Charles, St. Louis, Warren and St. Louis City).

Any type of loan financing is acceptable with the exception of a balloon loan. The mortgage loan must be for the purchase of a home and not for the refinancing of an existing mortgage. Those interested in applying should contact participating lenders. These lenders also will be able to determine the type of loan that is best for the homebuyer and answer specific questions regarding the program.

-30-