There has been a new development in the $8000 credit that first time home buyers can get from the government.
In an effort to incentivize home buyers, the Department of Housing and Urban Development has unveiled a policy change which will provide the tax credit up-front. According to the new policy, borrowers who avail mortgages from Federal Housing Administration (FHA) approved lenders can get advances from lenders in order to meet costs associated with home purchase.
This will enable borrowers to receive the tax credit in advance, so they don't have to wait to get the money from the IRS. However, the advance from the lender cannot be used for the 3.5% down payment that borrowers have to make for FHA loans. A typical loan has $3,000 to $4,000 in closing costs, title insurance, and other fees. The advance can be used by borrowers for meeting such costs.