JEFFERSON CITY, Mo. -- A Missouri housing commission, trying to help spur the state's real estate market, is offering some first-time homebuyers an advance payment on a $7,500 federal tax break to help cover down payments and closing costs.

The Missouri Housing Development Commission has worked out a deal that would provide a $6,750 advance payment to first-time homebuyers who qualify for the $7,500 federal tax credit; have household pretax income of less than $85,000; and have qualified for home loans.

Homebuyers would reimburse the commission after receiving their tax refunds. The advance would be treated as an interest-free loan if repaid on time, but would otherwise have to repaid with interest over 10 years.

Both the commission and homebuilders said Monday that Missouri is the first state to launch a program designed to speed up the receipt of the federal tax incentives.

The loan advance program started Jan. 14 but wasn't widely publicized until Monday, when House Speaker Ron Richard received the special committee's suggestions for helping Missouri's housing market.

So far, there have been 30 reservations for advances, and the housing commission anticipates there will be enough money for about 590 homebuyers. The federal tax credit, which homeowners pay off through increased federal taxes over 15 years, expires in June.

One of the biggest barriers to homeownership for first-time buyers is rounding up enough money for the down payment, Kathryn Watts, government affairs liaison for the Housing Development Commission, said Monday.

Watts said the housing commission had been looking for ways to bolster the impact of the federal tax credit because it wasn't helping as much as hoped.

"The tax credit doesn't come until you get your tax refund, and if the barrier is getting money for closing costs and a down payment, a tax credit that you don't get for six months doesn't help you much with that," she said.

Lawmakers and policy-makers seeking to deal with the recession have examined the housing market because its questionable lending decisions and ultimate collapse have been so prominent in the economy's decline.

Ken Stricker, of St. Louis-based Consort Homes and the chairman of the special task force, estimated that local building permits could hit their lowest mark in 30 years.

Pat Sullivan, of the Homebuilders Association of St. Louis and Eastern Missouri, said that residential carpenters alone have been working 2.6 million fewer hours per year since 2004.

The tax advance idea is among eight recommendations from the special task force on the housing market. The panel had 19 members, including lawmakers, bankers, homebuilders, real estate agents, developers and appraisers.

Other recommendations include revising the way property is assessed for taxes, the creation of a state tax credit for buying homes and changes to the reserve accounts required by local governments.

The reserve accounts, called escrow funds, are kept to cover costs for streets, sidewalks, waterlines, sewer lines and other public infrastructure needs. But developers complain that some local governments have required that too much money be left in reserve for too long.

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On the Net:

Missouri Housing Development Commission: http://www.mhdc.com

Interim Task Force on the Missouri Housing Market: http://www.house.missouri.gov/billtracking/bills081/commit/com534.ht m