AUGUSTA -- State lawmakers will consider a bill that would let first-time homebuyers take advantage of a federal tax credit to help them with a down payment.

Essentially, instead of buying a house and getting a tax credit next year, the bill would set up a mechanism in the state where homebuyers could get the money up front for down payments or even for home improvements.

The federal tax credit is part of President Obama's stimulus package. It allows a credit of 10 percent of the sale price, up to $8,000, on homes bought before Dec. 1 of this year. There are annual income limits for the credit: $75,000 for individual taxpayers, $150,000 for married taxpayers.

Rep. Richard Cleary, D-Houlton, said he filed L.D. 1483 this week as federal regulations crystallized and as several other states moved to take similar advantage of the stimulus program. But the Dec. 1 date puts a deadline on the program, he noted.

"Time is short; that's why we put it in this session," he said.

The measure would allow Maine's treasurer to deposit up to $4 million with financial institutions in the state and require them to provide bridge loans up to the amount buyers would receive under the tax credit.

The exact mechanics have yet to be worked out, but it's possible that homebuyers could essentially sign their right to the credit over to the lending institutions, allowing them to loan the money up front, and then collect the credit from the IRS directly, Cleary said.

Another way it could work is that banks could provide low- or zero-interest loans for a year, to be paid back by the homebuyers when they get the tax credit. Any money the state puts in would be recouped through the federal program.

"Rep. Cleary's proposal will frontload and therefore improve the federal first-time homebuyer program," said state Treasurer David Lemoine. "He's done his homework and come up with a great idea that should help a lot of Maine folks buy homes of their own during these difficult economic times."

By providing more money for a down payment, the proposal would allow first-time homebuyers to either buy more house or get a lower mortgage payment.

Rep. Elspeth Flemings, D-Bar Harbor, who worked on the bill with Cleary, said it is "very exciting."

"It makes a lot of sense for our community members in Maine, as well as our real-estate industry and the economy in general," she said.

The Maine housing market continues to ail, as does the national market.

Sales of existing single-family homes in Maine fell 14 percent in April, while the median sales price was down 10 percent. The latest report comparing April's figures with those of the same month in 2008 were released Wednesday by the Maine Association of Realtors.

The group said 610 homes sold in April, which is down from 708 a year earlier. The median price was $160,000, compared to $178,200 in April of last year. For the quarter ending April 30, sales and prices were down about 16 percent. Knox and Aroostook were the only counties where prices rose.

Cleary said he's talked with Realtors about the bill, and they have been supportive.

He noted that with prices low, this is a good time for people to jump in.

"I'd like to see first-time homebuyers be able to purchase in this market," he said.

Because the bill came well after the deadline for filing, Cleary needed permission from legislative leaders from both parties to submit it. He received unanimous approval, Cleary said, and has met with no opposition to the bill.

There is a public hearing scheduled for Tuesday at 1 p.m. in the Appropriations and Financial Affairs Committee, Room 228 of the Statehouse.