Use The $8,000 Tax Credit As A Down Payment?

At the National Association of Realtors legislative summit's meeting on May 12, 2009 HUD Secretary Shaun Donovan announced a plan that would allow first time homebuyers to use the $8,000 tax credit as a downpayment.

"We all want to enable FHA consumers to access the tax credit funds when they close on their home loans so that cash can be used as a donwpayment. So FHA will permit trusted FHA-approved lenders and HUD-approved nonprofits, as well as state and local governmental entities to "monetize" the tax credit through short-term bridge loans. We think the policy is a real win for everyone, ensuring that borrowers can tap into numerous organizations that are already part of the FHA network to receive this additional benefit. FHA will be publishing details shortly."

The $8,000 tax credit is available to first-time homebuyers who purchase and settle on a home prior to December 1, 2009.

Allowing first-time homebuyers to use the tax credit as a downpayment will help stimulate the housing market. A major obstacle holding many buyers back is the lack of the up front cash needed to complete the purchase.

With home prices down and interest rates hovering at near record lows, 2009 will go down in history as one of the best home buying opportunities for both first-time and move-up homebuyers.

Look for further details on this new programs as they become available.

Call me with any questions you have concerning the current market.