In a recent presentation to a group of realtors, HUD Secretary Donovan announced that borrowers would be allowed to use the $ 8,000 tax credit for their downpayment on HUD FHA Loans!
Then... S T O P, W A I T
On May 14th - two days later, the Mortgagee Letter 2009-15 has been put on hold by HUD.
HUD’s recently released Mortgagee Letter 2009-15, before it was "Pulled", allowed government agencies and other authorized entities, including FHA approved lenders, to offer either long-term secondary financing; or “short-term or bridge” loans secured by the anticipated tax credit for first time homebuyers established by the American Recovery and Reinvestment Act of 2009 (ARRA) for purchases and loan closings made prior to December 1, 2009.
My gut says the program will be BACK... but until further guidance is received from HUD LoanCentral has provided specific direction on using first-time homebuyer tax credits for the down payment, we will have to wait!
UNLESS you are in Washington State! Some states have already beat the U.S. Department of Housing and Urban Development to the punch on making bridge loans available to households who want to claim the First-Time Homebuyer Tax Credit.
The Washington REALTORS® association was able to convince treasury officials that the money loaned to home buyers would not only be paid back when tax credits took effect, but also increase the state’s funds. Once we can figure out how to circumvent the current IRS regulations that require the IRS to send all refunds directly to the tax payer... we may see the Tax Credit become available for borrowers to use as their downpayment!
Original Blog by George Charles of LoanCentral.
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