HUD: Yes You can Use the Tax Credit for your Down Payment 6/1/09

The Missing (Tax Credit) Link - Part II

Good news for 1st time home buyers!

HUD has once again allowed a homebuyer to "monetize" their $8000 1st Time Homebuyer Tax Credit.  Monetization means obtaining an advance on the tax credit for the use of paying a down payment and other costs associated with a home purchase.  Without an advance, the tax credit would only be available once a tax return is filed after the purchase of a home.  

Buyers beware: not all tax advances are the same.  Only advances made by State agencies and Hud-approved non-profits can be used for both the 3.5% down payment and other purchase related costs.  If the advance is made by any other party, including the lender, seller or an interested person to the transaction, then the down payment can only be used to pay costs in excess of the 3.5% required down payment.

Big difference.

Several states already have their programs in place.  So now it is up to the Housing Finance Authorities of the State of Georgia to implement the program set-up by HUD. 

I say do it quick............... this is good news of everyone!

UPDATE: TO DATE, THE STATE OF GEORGIA NEVER DID IMPLEMENT A PROGRAM TO PROVIDE THE FUNDING FOR STATE AND HUD-APPROVED NON-PROFITS TO MAKE TAX CREDIT ADVANCES POSSIBLE.