If you wanted to buy a Denver home and someone said to you, "Here's $8,000 to help you out!" what would your first response be? I'm betting it would be, "Great! Thanks! Can I use the $8,000 on my down payment? Currently, the answer is "No!" but that may be changing.
On May 12, 2009, Secretary of Housing and Urban Development Shaun Donovan, speaking before several thousand Realtors at the Realtors Midyear Legislative Meeting and Trade Expo, told the group that this would change for FHA borrowers. FHA-approved lenders would be able to "monetize" the credits through short-term bridge loans so that borrowers can apply the funds at closing.
In the past, new homebuyers would only receive the credit when they filed their 2008 or 2009 income tax. Those who buy a home this year can either wait until next year to claim the credit or file an amended 2008 return.
While $8,000 in hand is great to have even after a person buys a home, the National Association of Realtors (NAR) has argued that having the money available for a down payment will be a better stimulus than offering it later. The group also advocates expanding the credit to include all homebuyers at all income levels and expanding it past its November, 2009 expiration.
When coupled with falling home prices, high inventories of foreclosure and bank-owned properties at bargain prices, and low mortgage rates, the $8,000 credit is expected to lead to increased housing sales beginning in early summer - especially in view of the Donovan announcement. The ability to use the money as part of a down payment is expected to turn a lot of fence-sitters into new buyers. NAR economist Lawrence Yun anticipates that home sales will be up 10-20% in the second half of 2009.
The predicted economic recovery in housing is good news for the industry, as housing prices in Denver and elsewhere prices will become more stable. Buyers looking for a bargain may find fewer "steals" amidst the deals they can make.
If you are thinking about buying a home, now is the time to make your move. Your Denver Realtor at Bandy Homes can tell you the most current information about the credit and help you find the best lender to help you apply this credit to your down payment - after you have found a great new home in Highlands Ranch and other communities in metro Denver.
Marianne Bandy
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