State eyes plan to aid homebuyers

A plan to turn federal tax credits into down-payment help for fledgling homebuyers is gaining steam at the Capitol.

The full Senate approved a state budget proposal Thursday that would allow first-time homebuyers eligible for a federal income tax credit of up to $8,000 to sign it over to the state. In exchange, the state would provide an equivalent amount of money upfront to help the homebuyer make a down payment.

"It will go a long way in helping those who can use some assistance in getting into their first home - and at the same time, creating some revenue throughout the state with doc stamps and other revenues when people move into those homes," said Mike Fasano, R-New Port Richey, who succeeded in attaching the proposal last week to the Senate's $65.6 billion spending plan for next fiscal year.

The federal tax credits for first-time buyers, which are part of the federal government's stimulus spending package, apply only to primary residences purchased by Dec. 1. Under Fasano's plan, the Florida Housing Finance Corp. would dedicate $55 million from a state trust fund for affordable housing to provide the upfront help for homebuyers, to be reimbursed later by the federal government.

According to a Washington Economics Group study, such a program could make it possible for 12,000 Floridians to buy their first home.

The plan, which has backing from real estate agents as well as several consumer groups, is gaining interest in the House. Rep. Gary Aubuchon, R-Cape Coral, sponsor of the House's main affordable housing bill this year, said he intends to advocate for the down-payment program during final budget negotiations.

The challenge, he said, is finding the money to launch it - a tougher feat in the House, where leaders have already said there is no funding available. Unlike the House, the Senate has factored more than $1.5 billion in revenues from increased gambling and tobacco tax revenue into its budget proposal, and is planning to spend about $550 million more than the House is proposing.

But with the two chambers expected to agree on some sources of revenue during final negotiations, Aubuchon hopes that will provide some cash to boost first-time home purchases. "Over the course of the year, it will be revenue-neutral."

Rep. David Rivera, who oversees the House housing budget, likes the idea. "We're already in discussions and deliberations about that issue; it will be a conference issue," the Miami Republican said. "Hopefully we can come to an agreement with the Senate. I think it's a great idea."

Earlier this week, Gov. Charlie Crist backed the concept after meeting with real estate agents who are pushing the idea.

Among them was Alan Riley of Palm Harbor, who noted that $8,000 in upfront assistance would help homebuyers who qualify for financing through the Federal Housing Administration. FHA-insured loans allow consumers to purchase homes with down payments of as little as 3 percent.

"It's going to have a lot of impact," Riley said of the down-payment proposal. "We don't have much time left - it's just this year - so it's got to be done pretty quickly."