Just announced that FHA will permit the $8,000 tax credit, via a "bridge loan", to be used towards the down payment.

This is done by an approved nonprofit or governmental agency who typically will give the loan on the condition of being provided certain documents at closing (Final HUD namely), and will require that the credit be filed for that day.  The loan is recorded in 2nd position on title, typically interest free, and is released when it is repaid. Missouri started this before FHA made this announcement, and they require theirs to be repaid by June 2010.  Washington, Colorado, Idaho, Ohio, New Jersey, Delaware, Tennessee, Pennsylvania and New Mexico soon followed in participation.  I'm sure many more state, local and likely federal agencies will get involved.

Full FHA guidance can be found in their mortgagee letter 9-15 found at http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/09-15ml.doc

Shane Milne

Loan Officer

Banner Mortgage

949-273-4161 direct office

www.thebesthomeloans.com