They have been going back and forth on this issue, and now we have some good news for first time homebuyers:

On May 29, 2009, HUD announced that the $8000 tax credit for 1st time homebuyers CAN be used to offset down payment and/or closing costs on FHA insured mortgages. "FHA will permit entities covered by Section 528 of the National Housing Act to offer tax credit advances with second liens" was the exact language.

In other words, it will work like a "payday" loan. A second mortgage for the $8000 will be used to "advance" the expected $8000 credit to the borrower so they can use it now.

So far, we don't know how this will work and we'll have to trust our lending professionals to quickly respond to this terrific news.

Nancy Moeller, CPA, Real Estate Broker

Seven Gables Real Estate

(714) 276-7006

FAX (714) 917-2293

www.TheOCExperts.com